Metal, capital goods stocks lead decline

The key benchmark indices ended a choppy trading session lower, halting a two-day advance, as weak global stocks weighed on investors' sentiment. The BSE 30-share Sensex fell 172.63 points or 0.98%, off close to 150 points from the day's high and up close to 40 points from the day's low. The market breadth was weak.
High beta infrastructure stocks declined on selling pressure. Metal stocks declined as copper prices fell on concern monetary tightening in China will crimp demand for the metal. But, IT pivotals were off day's low on bargain hunting after an initial setback triggered by fall in ADRs on Friday, 30 April 2010. Interest rate sensitive banking and financial shares declined on fears the Reserve Bank of India may resort to further monetary tightening to counter soaring inflation. Auto shares survived the broad market decline on robust sales in April 2010.
Stocks were volatile. The market came off the lower level after an initial sharp slide triggered by weak Asian stocks. But the intraday recovery proved short-lived. The market weakened again shortly. Weakness persisted on the bourses in mid-morning trade. Recovery in select pivotals helped the market cut losses in early afternoon trade. The market slumped to fresh intraday lows in mid-afternoon trade as European stocks fell in early trade. The Sensex hit a fresh intraday low in mid-afternoon trade. The market recovered from lower level after hitting a fresh intraday low in late trade.
NSE's volatility index India VIX jumped after a two-day slide. The index surged 8.8% to 22.14. India VIX is a measure of the market's expectation of volatility over the next 30 calendar days. The index is calculated based on the S&P CNX Nifty options prices.
The fourth quarter corporate results announced so far have been fairly encouraging. The combined net profit of a total of 914 companies rose 28.7% to Rs 36916 crore on 31.2% rise in sales to Rs 338635 crore in the quarter ended March 2010 over the quarter ended March 2009.
Also on the positive side, an industry body report showed that business confidence in India improved on the back of economic recovery. The bi-annual Business Outlook Survey of the Confederation of Indian Industry (CII) showed that the Business Confidence Index (BCI) of the Indian industry increased by 1.5 points for the April-September 2010 period, compared to the past six months.
However, on the flip side, as per another survey a drop in new orders and output has resulted in the country's manufacturing expanding at a slower pace for the second month in a row. The HSBC Markit Purchasing Managers' Index, based on a survey of 500 companies, fell to 57.2 in April 2010 from 57.8 in March 2010. A figure of 50 separates contraction from expansion.
The latest data showed infrastructure sector output jumped 7.2% in March 2010 from a year earlier, higher than an upwardly revised rise of 4.7% in February 2010.
The Indian Meteorological department (IMD) expects normal rainfall in the June-September monsoon season this year. Rainfall is likely to be 98% of the long-term average, the IMD said on 23 April 2010. Good monsoon rains would help raise farm output, boost rural incomes and lower food inflation. The south west monsoon is important for India as about 60% of the country's farmlands are rain-fed and more than half of the workforce is employed in the agriculture sector. The quantum of rainfall in the crucial sowing month of July and distribution of rainfall during the monsoon season holds key.
The Reserve Bank of India expects India's economy to expand 8% in the year ending March 2011 (FY 2011) with an upward bias, assuming a normal monsoon this year and sustenance of good performance of the industrial and services sectors on the back of rising domestic and external demand.
The RBI at its annual policy review on 20 April 2010 said it will continue to monitor macroeconomic conditions, particularly the price situation closely and take further action as warranted. A 25 basis points hike in the cash reserve ratio (CRR) with effective from 24 April 2010 will suck out excess liquidity of Rs 12500 crore from the banking system.
In its half-yearly World Economic Outlook, the International Monetary Fund (IMF) has pegged India's GDP growth at 8.75% in calendar 2010 and 8.5% in calendar 2011. According to the IMF, domestic demand in India will strengthen as the labour market improves, and investment is expected to be boosted by strong corporate profitability, rising business confidence and favourable financing conditions.
European stocks declined on Monday, as the agreement of a 110-billion-euro aid deal for Greece was not enough to boost sentiment. The key benchmark indices in France and Germany declined by 0.09% to 0.5%. Markets in the UK were closed for a holiday.
Euro-region ministers on Sunday, 2 May 2010, agreed to a 110 billion-euro ($146 billion) rescue package for Greece to prevent a default and stop the worst crisis in the currency's 11-year history from spreading through the rest of the bloc.
Asian stocks declined on Monday after China on Sunday, 2 May 2010, raised the proportion of deposits that lenders must keep in reserve at the central bank. The key benchmark indices in Hong Kong, South Korea, Indonesia, Singapore and Taiwan fell by between 0.35% to 1.41%. The stock markets in China and Japan were closed for holidays.
The People's Bank of China said it was lifting lenders' reserve requirement ratio by 50 basis points, effective 10 May 2010, its third increase of that magnitude this year.
US stocks tumbled on Friday, 30 April 2010 as news of a criminal probe into US investment bank Goldman Sachs unnerved investors already worried about the prospects for heavy banking regulation. The Dow Jones Industrial Average fell 158.71 points or 1.42% to 11,008.61. The Standard & Poor's 500 Index lost 20.09 points, or 1.66% to 1,186.69. The Nasdaq Composite Index dropped 50.73 points, or 2.02% to 2,461.19.
The US economy expanded at a 3.2% annual rate in the first quarter slowing down from the fourth-quarter's rapid 5.6% pace
Trading in US index futures indicated that the Dow could rise 36 points at the opening bell on Monday, 3 May 2010.
Closer home, the BSE 30-share Sensex fell 172.63 points or 0.98% to 17,386.08. The index fell 21.85 points at the day's high of 17,536.86 in early trade. The Sensex lost 212.79 points at the day's low of 17,345.92 in late trade.
The S&P CNX Nifty declined 55.25 points or 1.05% to 5,222.75.
The market breadth, indicating the overall health of the market, was weak. On BSE, 1263 shares advanced as compared with 1650 that declined. A total of 76 shares remained unchanged.
The total turnover on BSE amounted to Rs 3580 crore, lower than Rs 4759.99 crore on Friday, 30 April 2010.
From the 30 share Sensex pack, 24 stocks declined while the rest gained.
The BSE Mid-Cap index fell 0.45% and the BSE Small-Cap index fell 0.42%. Both these indices outperformed the Sensex.
Most of the sectoral indices on BSE declined. The BSE Consumer Durables index (up 0.85%), the BSE Healthcare index (down 0.01%), the BSE PSU index (down 0.16%), the BSE FMCG index (down 0.3%), the BSE Auto index (down 0.41%), the BSE Oil & Gas index (down 0.42%), the BSE Bankex (down 0.66%), the BSE Teck Index (down 0.72%), the BSE IT index (down 0.96%), outperformed the Sensex.
The BSE Metal index (down 1.95%), the BSE Capital Goods index (down 1.2%), the BSE Realty index (down 1.1%), the BSE Power index (down 1.09%) and underperformed the Sensex.
High beta infrastructure stocks declined on selling pressure. India's largest private sector power utility firm by sales Reliance Infrastructure lost 3.01% to Rs 1101.90 and was the top loser from the Sensex pack
Larsen & Toubro (down 1.04%), Bharat Heavy Electricals (down 0.99%), Jaiprakash Associates (down 1.97%), Nagarjuna Construction Company (down 4.51%), Valech Engineering (down 4.6%), edged lower.
Metal and mining stocks declined as copper prices fell on concern monetary tightening in China will crimp demand for the metal. Hindalco Industries, Tata Steel, Sterlite Industries, Hindustan Zinc, JSW Steel and Sesa Goa fell by between 0.53% to 6.37%.
Index heavyweight Reliance Industries (RIL) was down 0.87% to Rs 1023.50. The stock hit a high of Rs 1032.45 and a low of Rs 1018.10. RIL said 28 April 2010 it had discovered oil in one of its exploration blocks in the Cambay basin on India's western coast, the block in which it holds 100% controlling interest. This is its fourth oil discovery in the region.
The Supreme Court may pronounce a judgement on the gas dispute between Reliance Industries (RIL) and Reliance Natural Resources (RNRL) shortly as the Chief Justice of India KG Balakrishnan retires on 11 May 2010. RNRL surged 4.78% on high volume of 1.13 crore shares on BSE. The RIL-RNRL gas dispute has been heard by a three-member Supreme Court bench led by the Chief Justice of India. The tussle relates to supply of gas to Reliance Natural Resources (RNRL) from the D6 block in the Krishna-Godavari eastern offshore fields of Mukesh Ambani-led Reliance Industries (RIL).
The dispute landed in the Supreme Court after seeing many twists and turns in lower courts. The two sides - RIL and RNRL had approached Supreme Court challenging a decision by the Bombay High Court. The Bombay High Court, in its order dated 15 June 2009 had directed that RNRL will get assured supply of 28 mmscmd of gas from RIL's Krishna-Godavari basin for 17 years at $2.34 per million British thermal units (mBtu). The gas price was 44.28% lower than the price fixed by the government for gas sale from the RIL block in the KG basin at $4.2 mBtu.
Oil exploration firms were mixed after crude-oil prices settled higher for a third straight session on Friday. Crude for June delivery, the most active contract, rose 98 cents, or 1.15%, to $86.15 a barrel on the New York Mercantile Exchange on Friday. Cairn India rose 0.79%. But, India's biggest state-run oil exploration firm by revenue Oil & Natural Gas Corporation (ONGC) declined 0.85%. India's second biggest oil and gas exploration firm by revenue, Oil India, fell 0.33%. Rise in crude oil prices would result in higher realizations from crude sales for oil exploration firms.
Shares of PSU OMCs gained, extending Friday's sharp surge, on reports a decision on freeing petrol and diesel prices from government control is likely to be taken after Parliament session ends on 7 May 2010. The move is likely to reduce losses of PSU OMCs on sale of petroleum products at controlled prices. HPCL, BPCL and Indian Oil Corporation rose by between 0.27% to 3.51%.
IT pivotals were off day's low on bargain hunting after an initial setback triggered by fall in ADRs on Friday, 30 April 2010. India's third largest software services exporter Wipro rose 0.18% to Rs 674.70, recovering from day's low of Rs 662. Its ADR fell 2.35% on Friday.
India's largest software services exporter TCS rose 0.13% at Rs 767, rebounding from day's low of Rs 754.10
India's second largest software services exporter Infosys slipped 1.52% to Rs 2694.50, off slightly from day's low of Rs 2680. Its ADR declined 1.75% on Friday.
Auto shares survived the broad market decline on robust sales for April 2010. India's largest bike maker by sales Hero Honda Motors advanced 0.86% to Rs 1,921.25 and was the top gainer from the Sensex pack. The company's two-wheeler sales rose 0.29% to 3.71 lakh units in April 2010 over April 2009. The flat sales for the month was due to acute shortage of batteries for over two weeks during the month due to problems at the suppliers' end. The company said these issues have now been resolved and the company has been assured of supply batteries returning to normal within a week's time.
The company added that it is witnessing a steadily growing demand for its products, and is ramping up production levels accordingly.
India's largest bike maker by sales Bajaj Auto was unchanged at Rs 2094.85. The stock came off a high of Rs 2167, which is a record high. Total vehicle sales surged 85% to 3.13 lakh units in April 2010 over April 2009.
India's largest small car maker by sales Maruti Suzuki India rose 0.2% to Rs 1282.25, rebounding from day's low of Rs 1265.15. Total sales rose almost 30% to 93,058 units in April 2010 over April 2009. Domestic sales rose 23.4% to 80,034 units.
India's largest utility vehicles maker by sales Mahindra & Mahindra was flat at Rs 526.05, recovering from the day's low of Rs 522.55, on reports the company's total vehicle sales rose 13% to 26,043 units in April 2010 over April 2009.
India's top truck maker by sales Tata Motors fell 1.98% to Rs 855.55 in volatile trade. The stock came off the day's high of Rs 882.20 which is also its 52-week high. It hit a low of Rs 848 during the day. Total sales including exports of commercial and passenger vehicles jumped 52% to 57,202 vehicles in April 2010 over April 2009. Domestic sales rose 49% to 54,065 units. Exports rose 148.8% to 3,137 units.
Commercial vehicle sales in the domestic market rose 36% to 30,963 units. Passenger vehicle sales jumped 70% to 24,902 units. Passenger vehicle sales include distribution of Fiat cars by Tata Motors. Sales of the ultra-cheap car Tata Nano totaled 3,525 units in April 2010
Interest rate sensitive banking and financial shares declined on fears the Reserve Bank of India may resort to further monetary tightening to counter soaring inflation. India's second largest private sector bank by net profit HDFC Bank fell 1.04% after its ADR lost 4.05% on Friday.
But, India's biggest commercial bank in terms of branch network State Bank of India rose 0.09%, extending recent strong gains. The bank has reportedly extended a special home loan scheme by two months till 30 June 2010. SBI's teaser rates scheme was to originally expire on 31 March 2010, but was later extended by a month to 30 April 2010.
Teaser rate scheme provides concessional home loans to borrowers in the initial years, after which the interest rate increases to align with prevailing market rates.
India's largest private sector bank by net profit ICICI Bank slipped 1.33%. Reportedly, the private sector bank has not extended the teaser rates after earlier extending it till April 2010.
India's largest mortgage lender by total income Housing Development Finance Corporation slipped 0.58% on profit taking. Net profit rose 26.31% to Rs 926.38 crore on 8.06% fall in total income to Rs 2899.32 crore in Q4 March 2010 over Q4 March 2009. The company's board approved a 5-for-1 stock-split.
Sugar stocks declined as sugar prices have seen a steady decline after the government slapped various restrictions, including introduction of fortnightly non levy sugar sale. Bajaj Hindusthan, Shree Renuka Sugars, Balrampur Chini Mills, Dhampur Sugars fell by between 0.76% to 1.92%.
Wholesale sugar prices corrected sharply from a record high of Rs 4,050 a tonne in January 2010 to Rs 2,704 a tonne on 30 April 2010.
Cals refineries clocked the highest volume of 1.56 crore shares on BSE. Birla Power Solutions (1.24 crore shares), Reliance Natural Resources (Rs 1.13 crore shares), FCS Software (79 lakh shares) and Vishal Information Technologies (54.32 lakh shares) were the other volume toppers in that order.
Tata Steel clocked the highest turnover of Rs 92.80 crore on BSE. Sesa Goa (Rs 84.93 crore), Reliance Natural Resources (Rs 82.89 crore), State Bank of India (Rs 79.17 crore) and Tata Motors (Rs 74.75 crore) were the other turnover toppers in that order.