FREE STOCK TIPS

MARKET HITS FRESH INTRADAY HIGH; BREADTH TURNS POSITIVE

Date: 11/04/2012

Key benchmark indices sharply pared losses to hit fresh intraday high in afternoon trade as investor sentiment improved after European stocks opened higher. The barometer index, BSE Sensex, was down 46.05 points or 0.27%, up about 122 points from the day's low and off about 13 points from the day's high. The market breadth turned positive from negative. Nine out 13 sectoral indices on BSE were negative.

Index heavyweight Reliance Industries (RIL) fell more than 1%. Capital goods stocks extended recent losses. Metal stocks slipped as global metal prices declined on Tuesday, 10 April 2012.

The market edged lower in early trade to hit its lowest level in almost two weeks. Weakness continued in morning trade. Key benchmark indices weakened again after trimming intraday losses to hit fresh intraday highs in morning trade. Weakness continued in early afternoon trade. Key benchmark indices sharply pared losses to hit fresh intraday high in afternoon trade as investor sentiment improved after European stocks opened higher.

At 13:15 IST, the BSE Sensex was down 46.05 points or 0.27% to 17,197.79. The index declined 32.67 points at the day's high of 17,211.17 in afternoon trade. The index fell 167.95 points at the day's low of 17,075.89 in early trade, its lowest level since 29 March 2012.

The S&P CNX Nifty was down 18.95 points or 0.36% to 5,224.65. The Nifty hit a high of 5,232.35 in intraday trade. The Nifty hit a low of 5,190.80 in intraday trade, its lowest level since 29 March 2012.

The market breadth, indicating the overall health of the market, turned positive from negative. On BSE, 1,273 shares rose and 1,266 shares fell. A total of 131 shares were unchanged.

From the 30-share Sensex pack, 18 stocks fell and rest of them rose. Bharti Airtel (down 1.15%), TCS (down 0.92%), ITC (down 0.79%), Bajaj Auto (down 0.60%), DLF (down 0.56%), Tata Motors (down 0.32%), Hindalco Industries (down 0.24%), Hindustan Unilever (down 0.17%), HDFC Bank (down 0.11%) and ICICI Bank (down 0.10%), edged lower from the Sensex pack.

Infosys (up 0.55%), Sun Pharmaceuticals Industries (up 0.52%), GAIL (India) (up 0.5%), NTPC (up 0.43%), ONGC (up 0.42%), Mahindra & Mahindra (up 0.31%) and State Bank of India (up 0.3%), edged higher from the Sensex pack.

Index heavyweight Reliance Industries (RIL) declined 1.28%. RIL is seen reporting weak Q4 earnings due to falling refining margins and reduced output from its KG-D6 gas blocks.

RIL early last week said its Jamnagar manufacturing unit is planning to take Maintenance and Inspection (M&I) shutdown of one of the diesel hydro treating unit for approximately three weeks duration from 2 April 2012. Routine activity of catalyst replacement is planned to be carried out during this shutdown and the opportunity will also be utilized to carry out revamp jobs so as to further enhance BS-IV grade diesel production capability from DTA refinery, RIL said. Remaining units of refinery, including crude processing units, are planned to operate at full throughput during this period, RIL said.

Capital goods stocks extended recent losses. The BSE Capital Goods index had underperformed the market over the past one month until 10 April 2012, falling 2.48% compared with the Sensex's 1.48% fall. The index had, however, outperformed the market in past one quarter, rising 10.50% as against 6.67% rise in the Sensex.

Among capital goods shares, Thermax (down 2.66%), BEML (down 2.19%), Havells India (down 1.67%), Lakshmi Machine Works (down 1.48%), Crompton Greaves (down 1.3%), Alstom Projects (down 1.04%), Punj Lloyd (down 0.87%), Siemens (down 0.86%), Bharat Electronics (down 0.55%), ABB (down 0.42%), Usha Martin (down 0.32%), BGR Energy Systems (down 0.3%) and Alstom T&D India (down 0.08%), edged lower.

India's largest engineering and construction firm, L&T, declined 0.65%, with the stock falling for the fourth straight day. L&T during trading hours on Monday said that L&T Construction, part of the L&T conglomerate, has commissioned India's largest solar photo voltaic based power plant (40 MWp) owned by Reliance Power at Dhursar village in Jaisalmer district of Rajasthan. With the commissioning of this plant, L&T Construction has installed 114 megawatts (MW) of utility scale solar PV power plants over the last fiscal -- a benchmark in India's solar EPC industry, L&T said.

L&T last week said its Electrical & Automation business has completed the share sale formalities for the acquisition of UK-based Thalest Group, which is engaged in offering integrated platform management system and integrated bridge system solutions for naval warships, mercantile marine ships, vessels and floating systems.

India's largest power equipment maker by order book Bharat Heavy Electricals (Bhel) dropped 1.11%, with the stock falling for the third straight day. Bhel's provisional net profit rose 14.25% to R 6868 crore on 13.76% growth in turnover to R 49301 crore in the year ended March 2012 over the year ended March 2011. Bhel's order inflow fell 63.48% to R 22096 crore in the year ended March 2012 (FY 2012) over the year ended March 2011 (FY 2011). The company announced the provisional results during trading hours on 3 April 2012

Separately, Bhel said on that day it had withdrawn draft red herring prospectus (DRHP) filed with the capital market regulator, Securities and Exchange Board of India (Sebi), for the proposed follow-on public offer. The government was planning to divest 5% of its stake through a follow-on public offer in Bhel, which was approved by the Cabinet in 2011. The Government of India (GoI) owns 67.72% stake in Bhel.

Metal stocks declined across the board as LMEX, a gauge of six metals traded on the London Metal Exchange dropped 2.97% on Tuesday, 10 April 2012. Jindal Steel & Power (down 2.71%), Hindustan Zinc (down 2.27%), Sail (down 0.96%), NMDC (down 0.83%), Hindalco Industries (down 0.52%) and JSW Steel (down 0.24%), edged lower.

Sesa Goa dropped 2.53%, with the stock extending Tuesday's 1.77% losses triggered by the company reporting decline in iron ore production and sales in Q4 March 2012. Sesa Goa said during market hours on Tuesday its iron ore sales fell 21% to 5.2 million tonnes in Q4 March 2012 over Q4 March 2011 due to the continued mining ban in Karnataka and transport and logistics bottlenecks in Goa. The company said it is expanding existing roads and establishing road corridors in Goa to reduce these bottlenecks. Production of iron ore declined 11% to 4.9 million tonnes in Q4 March 2012 over Q4 March 2011.

Sterlite Industries fell 2.30% and its subsidiary Hindustan Zinc declined 1.68%. Sterlite said during market hours on Tuesday that the company clocked record production of lead, silver and power in Q4 March 2012.

Mined Zinc-Lead metal production was 223,000 tonnes in Q4, 7% higher than in Q3. For the full year, mined Zinc-Lead metal production was marginally lower at 830,000 tonnes, it said. Refined Zinc production was marginally lower at 190,000 tonnes in Q4, and 6% higher at 759,000 tonnes for the year. Lead production in Q4 was 110% higher at a record 37,000 tonnes primarily due to the ramp-up of the new 100 ktpa Dariba Lead smelter, which contributed 18,000 tonnes. Silver production was at a record 88 tonnes in Q4, 77% higher as a result of ramp-ups of the SK mine, the new 100 ktpa Dariba Lead smelter and the new Silver refinery. Silver production for the full year was 35% higher at 242 tonnes.

Power sales were 2,166 million units and 7,579 million units during Q4 and the full year, as compared with 1,040 million units and 2,680 million units during the corresponding prior periods, respectively, as the three new 600 MW units of the Jharsuguda 2,400 MW power plant became operational. Aluminium production at 245 ktpa BALCO-II smelter was 62,000 tonnes, in line with the corresponding prior quarter. Copper cathode production at the Tuticorin smelter was 80,000 tonnes in Q4, in line with the corresponding prior period. For the full year, copper cathode production was 326,000 tonnes.

India's largest steel maker by sales Tata Steel declined 1.22%. The company early this week said sales from its Indian operations rose 3.3% to 1.77 million tonnes in Q4 March 2012 over Q4 March 2011. The Indian operations account for about a quarter of the group's total annual global capacity of about 28 million tonnes, which includes unit Corus, Europe's second-largest steelmaker. The company's crude steel production in India rose 2.6% to 1.82 million tonnes in Q4 March 2012 over Q4 March 2011. Sales from Indian operations rose 3.4% for the financial year ended March 2012 (FY 2012) to 6.63 million tonnes, helped by a 6% jump in sales of flat products, used in cars and consumer goods.

Foreign institutional investors (FIIs) sold shares worth R 328.66 crore on Tuesday, 10 April 2012, as per provisional data from the stock exchanges. Their outflow totaled R 598.09 crore in two trading sessions on 9 and 10 April 2012.

The government released the revised consolidated foreign direct investment (FDI) policy on Tuesday, relaxing norms of investment by foreign institutional investors (FIIs) in commodity exchanges. Now, FIIs will not require government approval to invest in these exchanges. The cap on FII investment, however, remains at 23%. The department of industrial policy and promotion (DIPP) under the commerce and industry ministry said government approval would nonetheless be required for the FDI component of investment up to 26% in commodity exchanges.

The next major trigger for the market is Q4 March 2012 and year ending March 2012 (FY 2012) earnings. Investors will focus on the guidance provided by the management for the year ending March 2013 (FY 2013) to gauge the earnings outlook.

IT bellwether Infosys announces Q4 March 2012 results on Friday, 13 April 2012. Lube oil major Castrol announces Q1 March 2012 results on 16 April 2012. Private sector bank HDFC Bank unveils FY 2012 results on 18 April 2012. HCL Tech unveils Q3 March 2012 results on the same day. ACC, Ambuja Cements and Hindustan Zinc unveil quarterly results on 19 April 2012. IndusInd Bank reports FY 2012 results on the same day. Cairn India reports FY 2012 results on 20 April 2012. TCS unveils FY 2012 results on 23 April 2012.

ICICI Bank unveils FY 2012 results on 27 April 2012. Axis Bank and Siemens announces quarterly results on the same day. Maruti Suzuki India unveils FY 2012 results on 28 April 2012. Titan Industries, Godrej Consumer Products, Exide Industries and Dabur India unveil FY 2012 results on 30 April 2012. FMCG giant Hindustan Lever unveils FY 2012 results on 1 May 2012. Ranbaxy Laboratories unveils its Q1 March 2012 results on 9 May 2012. Shree Cement unveils FY 2012 results on 15 May 2012. Housing finance major HDFC announces FY 2012 results on 7 May 2012. Colgate Palmolive (India) unveils FY 2012 results on 30 May 2012.

India should see a moderate uptick in growth during FY 2013 and FY 2014 as global conditions stabilize, but a return to the very strong performance of recent years hinges on moving the reform agenda forward, especially addressing issues that are constraining investment, says a new Asian Development Bank (ADB) report. ADB's flagship annual economic publication, Asian Development Outlook 2012 (ADO 2012) says gross domestic product growth should edge up to 7% in FY 2013 and 7.5% in FY 2014, after falling to 6.9% in FY 2012 from 8.4% the year before. The projection assumes that industrialized countries will post growth, India's monetary policy eases, the budget deficit is cut, and headway is made on long-standing structural and regulatory issues over the next two years.

Data on industrial production for February 2012 and that on inflation for March 2012 could provide cues on the central bank's likely policy stance at the monetary policy review for 2012-13 due on 17 April 2012. The government will unveil industrial production data for February 2012 tomorrow, 12 April 2012. Industrial production growth is projected at 6.5% in February 2012, according to median estimate of a poll of economists carried out by Capital Market. Industrial production grew 6.8% in January 2012.

On Friday, 13 April 2012, the government will unveil data on inflation based on the wholesale price index (WPI) for March 2012. Inflation based on the wholesale price index (WPI) is estimated at 6.7% in March 2012, according to median estimate of a poll of economists carried out by Capital Market. WPI inflation stood at 6.95% (provisional) for the month of February, 2012.

European stocks opened higher on Wednesday after US aluminum group Alcoa Inc. reported a surprise first-quarter profit on Tuesday. Key benchmark indices in UK, France and Germany were up by 0.25% to 0.71%.

Most Asian shares fell on Wednesday as uncertainty over global growth prospects, and resurfacing worries about debt restructuring in the euro zone, prompted investors to continue trimming their risk exposures. Key benchmark indices in Hong Kong, Japan, Indonesia, and Singapore fell by between 0.13% to 1.2%. China's Shanghai Composite was up 0.13% and Taiwan's Taiwan Weighted rose 0.21%. The stock market in South Korea was closed due to national elections in the country.

Japanese core machinery orders rose 4.8% in February, the Cabinet Office said Wednesday.

Trading in US index futures indicated that the Dow could gain 61 points at the opening bell on Wednesday, 11 April 2012. US stocks fell sharply on Tuesday, building on a four-session series of declines, as worries over rising borrowing costs for European countries weighed on investor sentiment ahead of the start of earnings season.

Powered by Commodity Insights