IT STOCKS ADVANCE AFTER STRONG US MANUFACTURING DATA
DATE: 02/05/2012
Key benchmark indices regained strength in mid-morning trade after a monthly survey showed pace of growth in manufacturing sector inched up in April 2012. Firm Asian stocks also supported domestic bourses. The barometer index, BSE Sensex, was up 93.29 points or 0.54%, off about 20 points from the day's high and up close to 45 points from the day's low.
The market breadth was strong. FMCG giant Hindustan Unilever (HUL) scaled record high after strong Q4 results. Other FMCG stocks also gained. IT stocks rose on positive economic data in the US, the biggest outsourcing market for the Indian IT firms.
The market edged higher in early trade to hit its highest level in more than one-week. The market trimmed gains in morning trade. The market regained strength in mid-morning trade.
BSE Sensex was up 93.29 points or 0.54% to 17,412.10. The index jumped 113.52 points at the day's high of 17,432.33 in early trade, its highest level since 23 April 2012. The index gained 48.19 points at the day's low of 17,367 in early trade.
The S&P CNX Nifty was up 22.70 points or 0.43% to 5,270.85. The Nifty hit a high of 5,279.60 in intraday trade, its highest level since 23 April 2012. The index hit a low of 5,254.30 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,369 shares gained and 864 shares fell. A total of 119 shares were unchanged.
From the 30-share Sensex pack, 20 rose while the rest declined. Tata Motors, Bajaj Auto and Maruti Suzuki India fell by between 1.25% to 2.3%. Bharti Airtel, DLF and ICICI Bank rose by between 1.58% to 2.16%.
Index heavyweight Reliance Industries (RIL) fell 0.03% to R 745, off the day's high of R 750.90. RIL on 20 April 2012 reported 21.2% fall in net profit to R 4236 crore on 16.7% growth 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.
FMCG giant Hindustan Unilever (HUL) rose 3.23% to R 429.80 after the company said on Tuesday, 1 May 2012, its net profit rose 20.63% to R 686.61 crore on 16.05% rise in total income to R 5835.86 crore in Q4 March 2012 over Q4 March 2011. The stock hit record high of R 433.90 today.
TCS reported 3.3% growth in consolidated net profit at R 2895 crore on 0.4% growth in revenue at R 13259 crore in Q4 March 2012 over Q3 December 2011. Net profit rose 15% to R 10413 crore on 31% growth in revenue at R 48894 crore in the year ended March 2012 (FY 2012) over the year ended March 2011 (FY 2011).
HCL Technologies rose 0.98% after the company said during market hours today that BD (Becton, Dickinson and Company), a leading global medical technology company, has signed an engineering and R&D services (ERS) engagement with HCL Technologies. (HCL). BD also officially inaugurated its first R&D facility in Chennai, Tamil Nadu today, 2 May 2012. This facility is a significant milestone for BD in its efforts to expand its R&D into Asia, and demonstrates its strong relationship with HCL, which began in 2007, HCL said.
The new facility is part of BD's efforts to accelerate R&D innovation to develop new products and markets, achieve time-to-market advantage for its products and enhance operational efficiencies. This facility will be directly managed by BD Singapore.
Meanwhile, the rupee edged lower at 52.765/775 against the dollar from Monday's close of 52.73/74 as oil importers' demand offsets positive stocks. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.
Standard & Poor's Ratings Services last week said that it had revised the rating outlooks on Infosys, TCS and Wipro to negative from stable. At the same time, it affirmed 'BBB+' long-term corporate credit ratings on these entities. The outlook revisions follow a similar action on the sovereign credit rating on India.
KPIT Cummins Infosystems jumped 20% after consolidated net profit rose 6.4% to R 43.71 crore on 26.7% growth in net sales to R 480.01 crore in Q4 March 2012 over Q3 December 2011. KPIT Cummins Infosystems has issued strong outlook for FY 2013. The company has projected 15% to 20% growth in consolidated PAT at R 167 crore to R 174 crore on 36% to 39% growth in revenue at R 2040 crore to R 2090 crore in FY 2013 over FY 2012. The company said that irrespective of the soft macro-economic environment, the company is fairly confident of growth in the coming years.
The pace of growth in India's factory sector inched up in April, supported by bulging order books, but slower output growth and increasing price pressures dampened sentiment, a business survey showed on Wednesday. The HSBC India Manufacturing Purchasing Managers' Index (PMI), compiled by Markit, rose to 54.9 in April from 54.7 in March. The index has remained above the 50-mark that divides growth from contraction for more than three years.
Foreign institutional investors (FIIs) bought shares worth R 479.53 crore on Monday, 30 April 2012, as per provisional data from the stock exchanges.
India's exports in March fell for the first time since the 2009 global financial crisis as demand weakened in the United States and Europe, further clouding the outlook for the country's balance of payments. Exports fell 5.7% to $28.7 billion in March 2012 over March 2011. Imports rose 24.3% to $42.6 billion in March.
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.
Bank of Baroda unveils Q4 results on Friday, 4 May 2012. Grasim Industries announces FY 2012 results on Saturday, 5 May 2012. Housing finance major HDFC announces FY 2012 results on 7 May 2012. Hindalco and Asian Paints unveil Q4 results on 8 May 2012. Kotak Mahindra Bank announces FY 2012 results on 8 May 2012.
Punjab National Bank and Ranbaxy Laboratories unveil quarterly results on 9 May 2012. NTPC announces FY 2012 results on 10 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. Mahindra & Mahindra (M&M) unveils FY 2012 results on 30 May 2012.
Asian shares edged higher on Wednesday as gains on Wall Street and an improved reading of China manufacturing activity in an official survey underpinned sentiment. Key benchmark indices in China, Hong Kong, Indonesia, Japan, Singapore, Taiwan and South Korea rose by between 0.3% to 2.28%.
Data out on Tuesday showed the Chinese manufacturing sector steadily improving in April, rising for a fifth straight month. Separately, HSBC also released its own manufacturing survey results for April, which also showed an improvement, although the index still remained in contraction territory.
Also helping Chinese stocks was news that the China Securities and Exchange Commission and the mainland stock markets would lower costs for stock transactions, while requirements for initial public offerings would be tightened, and unqualified firms would be forced to delist.
Japanese financial markets will be closed for public holidays on Thursday and Friday.
Trading in US index futures indicated that the Dow could gain 24 points at the opening bell on Wednesday, 2 May 2012. US factory activity grew in April at the strongest rate in 10 months, with the Institute for Supply Management's index rising to 54.8 from 53.4 in March, beating forecasts. ISM's gauge of employment also rose to its highest level since last June, coming ahead of the government's nonfarm payrolls report due on Friday, which is forecast to show the economy added 170,000 jobs in April.
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