INFOSYS SLIDES ON REPORTS OF US SCRUTINY
DATE: 23/04/2012
Key benchmark indices extended intraday gains to hit fresh intraday highs in morning trade as index heavyweight Reliance Industries (RIL) strengthened. RIL rose more than 1%, as the stock shrugged off weak Q4 results. The barometer index, BSE Sensex, was up 60.76 points or 0.35%, up about 95 points from the day's low and off close to 10 points from the day's high. The market breadth was strong.
Interest rate sensitive auto stocks extended recent strong gains triggered by the Reserve Bank of India (RBI) cutting repo rate by a sharper-than-expected 50 basis points at its monetary policy review on Tuesday, 17 April 2012. Capital goods pivotal rose on bargain hunting after three-day losing streak. India's second largest software services exporter by revenue, Infosys, fell on reports that the company is under scrutiny from US authorities for likely errors in employer eligibility documents of its staff.
The market moved into the positive terrain after opening lower. The market extended initial gains to hit fresh intraday high in morning trade.
BSE Sensex was up 60.76 points or 0.35% to 17,434.60. The index rose 70.34 points at the day's high of 17,444.18 in morning trade. The index fell 36.95 points at the day's low of 17,336.89 in early trade.
The S&P CNX Nifty was up 14.95 points or 0.28% to 5,305.75. The Nifty hit a high of 5,310.55 and a low of 5,274.75 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,178 shares gained and 161 shares fell. A total of 75 shares were unchanged.
From the 30-share Sensex pack, 19 rose while the rest declined. Jindal Steel & Power, DLF and Hindalco Industries shed by between 0.56% to 1.24%. Coal India, ICICI Bank and Tata Steel rose by between 0.64% to 1.43%.
Index heavyweight Reliance Industries (RIL) rose 1.32%. The company after market hours on Friday, 20 April 2012, reported 21.2% fall in net profit to R 4236 crore on 16.7% rise in turnover to R 87833 crore in Q4 March 2012 over Q4 March 2011. The company reported GRM (gross refining margin), the difference between the price of petroleum products and crude oil, of $7.6 per barrel in Q4 March 2012 compared with GRM of $6.8 per barrel in Q3 December 2011 and $9.2 per barrel in Q4 March 2011.
Commenting on the results, Mukesh D. Ambani, Chairman and Managing Director, RIL said: Our businesses have delivered industry leading performances. This is a reflection of the quality of our assets and growing demand for our products and services in India and internationally. We have created a strong foundation for future growth and are investing in our core upstream and petrochemical businesses in India. Response to our organized retail business has been very encouraging and we continue to expand our footprint by building more stores across verticals, formats and geographies. We remain committed towards providing world class, high speed wireless data services through the launch of our broadband access business.
Interest rate sensitive auto stocks extended recent strong gains after the Reserve Bank of India (RBI) cut repo rate by a sharper-than-expected 50 basis points in its monetary policy review on Tuesday, 17 April 2012. Lower interest rates may help revive demand for vehicles. Purchases of automobiles, including that of cars, utility vehicles and commercial vehicles are substantially driven by financing.
India's largest tractor maker by sales Mahindra & Mahindra (M&M) rose 0.5%. The government reportedly approved the foreign direct investment (FDI) proposal worth of R 25.99 crore for company's radar systems.
India's largest small car maker by sales Maruti Suzuki India gained 0.9%. Recent reports indicated that the company has received overwhelming response for its multi-purpose vehicle Ertiga launched on 12 April 2012. Reports suggest that since its launch, more than 11,000 units of the Ertiga have been booked. The company was reportedly targeting around 5,000 unit sales per month, when it was launched. The new car could be a key volume driver for Maruti in fiscal 2012-13.
India's largest commercial vehicle maker by sales Tata Motors gained 0.44% to R 318.10. The stock had hit a record high of R 320.60 on Friday, 20 April 2012. The company recently reported 26% rise in global vehicle sales to 1.39 lakh units in March 2012 over March 2011. Global sales of all commercial vehicles were reported at 63,791 units in March 2012, a growth of 12% over March 2011.
Passenger cars sales stood at 75,864 vehicles, a rise of 41% from a year previously. Sales of its Jaguar Land Rover (JLR) brands stood at 36,471 vehicles in the month, an annual rise of 51%. Tata Motors sold 12.52 lakh vehicles globally in the fiscal year ended March 2012, a 16% increase on sales in the fiscal year ended March 2011.
The country's largest two-wheeler maker Hero MotoCorp gained 0.28%. The country's second largest two-wheeler maker Bajaj Auto lost 0.1%.
Capital goods pivotals rose on bargain hunting after three-day losing streak. India's largest power equipment maker by sales Bhel rose 0.16%.
India's largest engineering and construction firm by order book L&T gained 0.93%. The company announced during market hours on Friday that the SUN Group has commissioned one of the fastest executed solar projects in India at the Gujarat Solar Park, which was inaugurated by Gujarat Chief Minister Narendra Modi in the Patan district. The 6MWp project was completed in a little over 3 months in association with L&T, who provided the Engineering, Procurement and Construction (EPC) services for the project.
India's second largest software services exporter by revenues Infosys fell 1.42% on reports that the company is under scrutiny from US authorities for likely errors in employer eligibility documents of its staff. Infosys' shares saw a steep fall recently after a weaker-than-expected revenue growth outlook for the current fiscal year.
IDBI Bank rose 2.41% after net profit jumped 49.3% to R 770.78 crore on 20.3% growth in total income to R 6856.42 crore in Q4 March 2012 over Q4 March 2011. IDBI Bank said the figures of the previous period include the working results of the two erstwhile wholly owned subsidiary of the bank namely IDBI Home Finance and IDBI Gilts for the period from 1 January 2011 to 31 March 2011 consequent on merging with the bank. Accordingly, the figures of the previous year are not strictly comparable, the IDBI Bank said. Figures for the previous year have been regrouped and rearranged wherever considered necessary to make them comparable with current year's figures, IDBI Bank said.
The market may remain volatile this week as traders roll over positions from the near-month April 2012 series to May 2012 series. The April 2012 derivatives contracts expire on Thursday, 26 April 2012.
Investors are closely watching India Inc's Q4 March 2012 and year ending March 2012 (FY 2012) earnings. Focus is on the guidance provided by the management for the year ending March 2013 (FY 2013) to gauge the earnings outlook.
Sesa Goa unveils Q4 results on 24 April 2012. Wipro and Sterlite Industries India unveil their Q4 results on 25 April 2012. ICICI Bank unveils FY 2012 results on 27 April 2012. Axis Bank, Jindal Steel & Power and Siemens unveil quarterly results on the same day. Maruti Suzuki India unveils FY 2012 results on 28 April 2012.
FMCG giant Hindustan Unilever unveils FY 2012 results on 1 May 2012. Hero MotoCorp announces Q4 results on 2 May 2012. Housing finance major HDFC announces FY 2012 results on 7 May 2012. Ranbaxy Laboratories will declare its Q1 March 2012 results on 9 May 2012. Dr Reddy's Laboratories announces FY 2012 results on 11 May 2012. Bajaj Auto announces FY 2012 results on 17 May 2012. BPCL unveils FY 2012 results on 25 May 2012.
The Reserve Bank of India (RBI) in its annual monetary policy for 2012-13 on 17 April 2012 cut repo rate, by a sharper-than-expected 50 basis points to give a boost to flagging economic growth. The RBI, however, warned that there is limited scope for further rate cuts. The RBI left unchanged the cash reserve ratio (CRR), the share of deposits that banks must hold with the central bank, at 4.75%, in line with expectations, after cutting it by 125 basis points since January 2012 to ease tight market liquidity. The RBI said its baseline expectation for GDP growth in the fiscal year that ends in March 2013 is 7.3%, compared with an expected 6.9% in the year ended March 2012. It expects headline inflation to end the year at 6.5%, with little deviation expected during the year. The RBI had raised rates 13 times between March 2010 and October 2011 as it struggled to contain price pressures.
Asian stocks edged lower amidst volatility on Monday, 23 April 2012. Key benchmark indices in China, Hong Kong, Japan, Singapore, South Korea and Taiwan were down by between 0.14% to 0.6%. Indonesia's Jakarta Composite rose 0.21%.
China's manufacturing activity contracted further in April, although the sector improved from levels seen in March, a preliminary reading from HSBC showed Monday. HSBC's so-called flash Purchasing Managers' Index rose to 49.1 in April, compared with a final reading of 48.3 in March. A reading below 50 shows contraction, while one above 50 indicates an expansion.
The Group of 20 nations on Friday pledged $430 billion in new funding to the International Monetary Fund, more than doubling its lending power in a bid to protect the global economy from the euro-zone debt crisis. The promised funds from advanced and emerging economies will provide the global lender with a huge war chest should the sovereign debt problems that have engulfed three euro zone countries spread and threaten a fragile recovery.
Trading in US index futures indicated that the Dow could fall 27 points at the opening bell on Monday, 23 April 2012.
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