Market winces as RBI cracks the whip
Across-the-board selling forced all BSE sectoral indices to finish in the red. The market was extremely volatile throughout the session. A hawkish stance taken by the RBI during the review of its annual monetary policy and the Federal Reserve's meeting scheduled later today, soured the mood on the bourses.
The 30-shares BSE Sensex lost 121.04 points (0.85%), to end at 14,090.92. It had opened higher, at 14,219.38, and surged to a high of 14,269.31 in early trade. The benchmark index had also plunged to a low of 14,045.61. It fluctuated a sharp 223.70 points for the day.
The S&P CNX Nifty slipped 41.75 points (1.01%) to 4,082.70.
The market-breadth ended negative as small-cap and mid-cap stocks remained under pressure. For 1,706 shares declining, 939 advanced and 43 remained unchanged. The total turnover on BSE amounted to Rs 5099 crore.Among the 30-Sensex pack, 19 declined while the rest advanced.
Tata Steel was mauled. It was the top loser in the Sensex. The scrip plunged 11.10% to Rs 461.80, on high volumes of 58.66 lakh shares. The stock also plunged to a low of Rs 461.10, down from the day’s high of Rs 510.
Tata Steel has offered Corus' investors 608 pence per share in cash, topping a final bid of 603 pence from Brazilian Companhia Siderurgica Nacional (CSN). The 608 pence per share that Tata Steel will pay values Corus at around seven times its forecast of earnings before interest, tax, depreciation and amortisation (EBITDA) for 2006, well above the multiple Mittal Steel paid for Arcelor. Mittal Steel had paid 4.6 times the latter's historic EBITDA.
Tata Steel posted 41.1% growth in net profit in the December 2006 quarter to Rs 1063.75 crore, on 21.4% growth in net sales to Rs 4469.98 crore. Both the bottom line and top line growth were as per market expectations.
Hindalco (down 3.24% to Rs 174.85), HLL (down 3% to Rs 207.45) and Wipro (down 2.66% to Rs 614), were the other losers.
ONGC was down 1.39% to Rs 901.90. It reported a stronger-than-expected 20% growth in net profit in the December 2006 quarter at Rs 4668.31 crore (Rs 3887.76 crore). The growth was mainly due to a fall in ONGC's subsidy sharing burden.
Cement maker Gujarat Ambuja Cements was the top gainer, up 1.78% to Rs 137, as 12.56 lakh shares changed hands on BSE.
Reliance Energy (REL) gained 1.60% to Rs 514, on a volume of 5.26 lakh shares. REL has bagged power projects worth about Rs 4,150 crore in Haryana and Uttar Pradesh.
The Haryana Power Generation Coporation awarded a contract for two units of 600 Mw each on a turnkey basis to REL. The Rs 3,763 crore project will be executed by the company's Engineering, Procurement and Construction (EPC) division.
The second contract of Rs 395 crore has been awarded by Uttar Pradesh Rajya Vidyut Nigam for balancing plant package of 500 Mw Parichha extension project.
ITC rose 0.93% to Rs 174, after reporting 33.6% growth in net profit in the December 2006 quarter to Rs 717.40 crore, from Rs 536.83 crore during the year ago period. The net profit was at the top end of analysts' expectations. Net sales rose 23.8% to Rs 3165.57 crore (Rs 2556.04 crore), which was also in line with estimates.
Index heavyweight Reliance Industries (RIL) was down 1.52% to Rs 1360.75. It had advanced to a high of Rs 1390. As many as 11.82 lakh shares changed hands in the RIL counter.
Metal stocks had a difficult time on the bourses. The BSE Metal index tanked 476.44 points (4.88%), to 9,283.61. The foremost loser was private sector steel giant, Tata Steel, which was down over 10%, as the final offer of $11.3 billion made by it for Europe's Corus is believed to be expensive. A lot of brokerages have downgraded the stock following this event.
Other metal stocks to suffer included Hindalco (down 3.24% to Rs 174.85), Sesa Goa (down 3.14% to Rs 1885.50), Jindal Stainless (down 4.02% to Rs 123), SAIL (down 4.02% to Rs 108.50), Saw Pipes (down 0.23% to Rs 460), NALCO (down 1.67% to Rs 230), Hindustan Zinc (down 6.25% to Rs 713), and Ispat Industries (down 1.35% to Rs 16.09).
The tide turned for banks after the RBI’s monetary policy was announced, albeit briefly. But the rot set in as time elapsed. The BSE Bankex was down 0.45%.
Centurion Bank of Punjab (down 4.11% to Rs 36.15), Canara Bank (down 2.88% to Rs 239.20), Vijaya Bank (down 2.70% to Rs 48.65), ICICI Bank (down 2% to Rs 936.50), State Bank of India (down 1.75% to Rs 1135.15), Bank of India (down 1.68% to Rs 190.55), Karnataka Bank (down 1.65% to Rs 170.20) and Kotak Mahindra Bank (down 1.38% to Rs 466.50) lost heavily.
Autoline Industries settled at Rs 257.95, over its IPO price of Rs 225 per share. The stock debuted at Rs 261.15 on BSE. The scrip also struck a high of Rs 282 and a low of Rs 252.25. As many as 57.62 lakh shares changed hands in the counter.
Mahindra & Mahindra (M&M) lost 2.88% to Rs 899. Its Q3 December 2006 net profit increased to Rs 241.68 crore, compared to Rs 233.45 crore during Q3 December 2005. Total income increased during the same quarter to Rs 2617.30 crore (Rs 2247.45 crore).
Balrampur Chini plunged 6.84% to Rs 67.30, after its Q1 December 2006 net profit declined to Rs 19.18 crore compared to Rs 39.89 crore in Q1 December 2005. Net sales rose to Rs 337.11 crore (Rs 286.78 crore).
Tata Power rose 0.30% to Rs 612. Its Q3 December 2006 net profit was up 23% to Rs 280.14 crore from Rs 228.04 crore in Q3 December 2005. Net sales slipped 2% to Rs 1200.51 crore (Rs 1224.77 crore).
Trent advanced 1.30% to Rs 815, after reporting a 67% surge in net profit in the December 2006 quarter to Rs 10.71 crore (Rs 6.42 crore). Net sales went up to Rs 121.82 crore (Rs 95.16 crore).
Monsanto India dropped 10% to Rs 1501.60, after reporting 31.6% fall in net profit in the December 2006 quarter to Rs 14.29 crore (Rs 20.88 crore). Net sales declined 18.7% for the same period to Rs 70.72 crore (Rs 86.96 crore).
Gillette India surged 3.88% to Rs 925, on reporting 85.4% net profit growth in the December 2006 quarter. Gillette India reported 85.4% surge in net profit in the December 2006 quarter to Rs 27.71 crore (Rs 14.95 crore). Net sales rose 13% to Rs 131.22 crore (Rs 116.09 crore). The company’s board also declared a liberal interim dividend of Rs 10 per share.
Thirumalai Chemicals plunged 15% to Rs 156, on reporting a net loss in the December 2006 quarter. Thirumalai Chemicals reported a net loss of Rs 1.36 crore in the December 2006 quarter compared to a net profit of Rs 1.60 crore in the December 2005 quarter. Net sales rose 54.5% in the same period to Rs 110.23 crore (Rs 71.33 crore).
UTI Bank advanced 6% to Rs 534. Ratings agency Standard & Poors on Tuesday (30 January) raised the rating on the private bank.
Gujarat Apollo Equipment jumped 8.31% to Rs 228.80, after it reported 48% growth in net profit in the Dec-2006 quarter to Rs 4.80 crore (Rs 3.25 crore). Net sales rose 14% to Rs 33.88 crore (Rs 29.67 crore).
Along with the announcement of Q3 results, the company’s board also recommended a 1:2 bonus issue (a bonus share for two existing ones) on Tuesday (30 January 2007). The company also said it will pursue listing on National Stock Exchange (NSE) on completing the proposed bonus issue.
Areva T&D India jumped 11.41% to Rs 1184.50, on reporting 108.9% surge in net profit for the December 2006 quarter. Areva T&D India reported 108.9% surge in net profit in the December 2006 quarter to Rs 32.22 crore (Rs 15.42 crore). Net sales jumped 15.7% to Rs 400.70 crore (Rs 346.19 crore). The company’s operating profit rose 96.5% to Rs 56.10 crore (Rs 28.54 crore). Sales of continuing business rose 35.4% to Rs 400.70 crore in the Dec-2006 quarter from Rs 295.75 crore in the same quarter a year ago.
Gujarat Mineral Development Corporation jumped 9.60% to Rs 425.20, after reporting a sharp rise in net profit for the December 2006 quarter. The company's net profit surged to Rs 52.65 crore from Rs 1.35 crore in the December 2005 quarter. The surge in net profit was due to a change in deprecation policy. The company's balance sheet shows a credit of Rs 16.98 crore for depreciation in the December 2006 quarter. Net sales rose 17.6% in this period compared to Rs 132.79 crore in the year ago period.
The Nikkei share average dropped 0.61% on Wednesday, as Sony Corp and TDK Corp declined after raising their profit forecasts more cautiously than investors had expected. The Nikkei was down 106.77 points, at 17,383.42.
The Reserve Bank of India (RBI) reviewed its annual monetary policy and found the rate of bank credit growth "clearly excessive." Bank credit is growing at a robust 30%.
The RBI, therefore, hiked its repo rate by 25 basis points to 7.5%. The statement, which was very much on expected lines, left the cash reserve ratio (CRR) and reverse repo rate unchanged at 5.5% and 6%, respectively. The central bank also kept the bank rate unchanged at 6%.
The central bank said its monetary stance will be to ensure price stability and anchor inflation expectations. The RBI said its objective is to bring inflation as close as possible to 5.0-5.5%. Governor Y V Reddy reiterated RBI's committment to adapt to evolving global and domestic situations, which impact inflation and growth.
The central bank added liquidity management will be given top priority in the remaining part of the year. It said it would use all policy instruments at its disposal to regulate money supply.
The government on Wednesday revised upwards its 2005/06 gross domestic product growth estimate to 9% from an earlier 8.4%. Manufacturing output growth was revised to 9.1% for the year to March 2006, from the earlier 9%. Growth in farm output for 2005/06 was pegged at 6% compared to an earlier estimate of 3.9%.
Even the Federal Reserve officials meet later today, and may leave the overnight lending rate unchanged at 5.25%. Fed officials say controlling inflation is a priority than preventing any possible economic weakness.
US stocks rose on Tuesday as a 5.5% jump in oil prices to nearly $57 a barrel sparked a rally in the energy sector, while shares of Motorola Inc gained after investor Carl Icahn said he wanted a seat on Motorola's board.
The Dow Jones industrial average rose 32.53 points, or 0.26%, to end at 12,523.31. The Standard & Poor's 500 Index added 8.20 points, or 0.58%, to finish at 1,428.82. The Nasdaq Composite Index gained 7.55 points, or 0.31%, to close at 2,448.64.
Oil notched up its biggest gain in 16 months on Tuesday, as funds poured fresh cash into the market because of cold US weather and OPEC supply cuts. US crude was trading at $56.71 a barrel early on Wednesday.
The 30-shares BSE Sensex lost 121.04 points (0.85%), to end at 14,090.92. It had opened higher, at 14,219.38, and surged to a high of 14,269.31 in early trade. The benchmark index had also plunged to a low of 14,045.61. It fluctuated a sharp 223.70 points for the day.
The S&P CNX Nifty slipped 41.75 points (1.01%) to 4,082.70.
The market-breadth ended negative as small-cap and mid-cap stocks remained under pressure. For 1,706 shares declining, 939 advanced and 43 remained unchanged. The total turnover on BSE amounted to Rs 5099 crore.Among the 30-Sensex pack, 19 declined while the rest advanced.
Tata Steel was mauled. It was the top loser in the Sensex. The scrip plunged 11.10% to Rs 461.80, on high volumes of 58.66 lakh shares. The stock also plunged to a low of Rs 461.10, down from the day’s high of Rs 510.
Tata Steel has offered Corus' investors 608 pence per share in cash, topping a final bid of 603 pence from Brazilian Companhia Siderurgica Nacional (CSN). The 608 pence per share that Tata Steel will pay values Corus at around seven times its forecast of earnings before interest, tax, depreciation and amortisation (EBITDA) for 2006, well above the multiple Mittal Steel paid for Arcelor. Mittal Steel had paid 4.6 times the latter's historic EBITDA.
Tata Steel posted 41.1% growth in net profit in the December 2006 quarter to Rs 1063.75 crore, on 21.4% growth in net sales to Rs 4469.98 crore. Both the bottom line and top line growth were as per market expectations.
Hindalco (down 3.24% to Rs 174.85), HLL (down 3% to Rs 207.45) and Wipro (down 2.66% to Rs 614), were the other losers.
ONGC was down 1.39% to Rs 901.90. It reported a stronger-than-expected 20% growth in net profit in the December 2006 quarter at Rs 4668.31 crore (Rs 3887.76 crore). The growth was mainly due to a fall in ONGC's subsidy sharing burden.
Cement maker Gujarat Ambuja Cements was the top gainer, up 1.78% to Rs 137, as 12.56 lakh shares changed hands on BSE.
Reliance Energy (REL) gained 1.60% to Rs 514, on a volume of 5.26 lakh shares. REL has bagged power projects worth about Rs 4,150 crore in Haryana and Uttar Pradesh.
The Haryana Power Generation Coporation awarded a contract for two units of 600 Mw each on a turnkey basis to REL. The Rs 3,763 crore project will be executed by the company's Engineering, Procurement and Construction (EPC) division.
The second contract of Rs 395 crore has been awarded by Uttar Pradesh Rajya Vidyut Nigam for balancing plant package of 500 Mw Parichha extension project.
ITC rose 0.93% to Rs 174, after reporting 33.6% growth in net profit in the December 2006 quarter to Rs 717.40 crore, from Rs 536.83 crore during the year ago period. The net profit was at the top end of analysts' expectations. Net sales rose 23.8% to Rs 3165.57 crore (Rs 2556.04 crore), which was also in line with estimates.
Index heavyweight Reliance Industries (RIL) was down 1.52% to Rs 1360.75. It had advanced to a high of Rs 1390. As many as 11.82 lakh shares changed hands in the RIL counter.
Metal stocks had a difficult time on the bourses. The BSE Metal index tanked 476.44 points (4.88%), to 9,283.61. The foremost loser was private sector steel giant, Tata Steel, which was down over 10%, as the final offer of $11.3 billion made by it for Europe's Corus is believed to be expensive. A lot of brokerages have downgraded the stock following this event.
Other metal stocks to suffer included Hindalco (down 3.24% to Rs 174.85), Sesa Goa (down 3.14% to Rs 1885.50), Jindal Stainless (down 4.02% to Rs 123), SAIL (down 4.02% to Rs 108.50), Saw Pipes (down 0.23% to Rs 460), NALCO (down 1.67% to Rs 230), Hindustan Zinc (down 6.25% to Rs 713), and Ispat Industries (down 1.35% to Rs 16.09).
The tide turned for banks after the RBI’s monetary policy was announced, albeit briefly. But the rot set in as time elapsed. The BSE Bankex was down 0.45%.
Centurion Bank of Punjab (down 4.11% to Rs 36.15), Canara Bank (down 2.88% to Rs 239.20), Vijaya Bank (down 2.70% to Rs 48.65), ICICI Bank (down 2% to Rs 936.50), State Bank of India (down 1.75% to Rs 1135.15), Bank of India (down 1.68% to Rs 190.55), Karnataka Bank (down 1.65% to Rs 170.20) and Kotak Mahindra Bank (down 1.38% to Rs 466.50) lost heavily.
Autoline Industries settled at Rs 257.95, over its IPO price of Rs 225 per share. The stock debuted at Rs 261.15 on BSE. The scrip also struck a high of Rs 282 and a low of Rs 252.25. As many as 57.62 lakh shares changed hands in the counter.
Mahindra & Mahindra (M&M) lost 2.88% to Rs 899. Its Q3 December 2006 net profit increased to Rs 241.68 crore, compared to Rs 233.45 crore during Q3 December 2005. Total income increased during the same quarter to Rs 2617.30 crore (Rs 2247.45 crore).
Balrampur Chini plunged 6.84% to Rs 67.30, after its Q1 December 2006 net profit declined to Rs 19.18 crore compared to Rs 39.89 crore in Q1 December 2005. Net sales rose to Rs 337.11 crore (Rs 286.78 crore).
Tata Power rose 0.30% to Rs 612. Its Q3 December 2006 net profit was up 23% to Rs 280.14 crore from Rs 228.04 crore in Q3 December 2005. Net sales slipped 2% to Rs 1200.51 crore (Rs 1224.77 crore).
Trent advanced 1.30% to Rs 815, after reporting a 67% surge in net profit in the December 2006 quarter to Rs 10.71 crore (Rs 6.42 crore). Net sales went up to Rs 121.82 crore (Rs 95.16 crore).
Monsanto India dropped 10% to Rs 1501.60, after reporting 31.6% fall in net profit in the December 2006 quarter to Rs 14.29 crore (Rs 20.88 crore). Net sales declined 18.7% for the same period to Rs 70.72 crore (Rs 86.96 crore).
Gillette India surged 3.88% to Rs 925, on reporting 85.4% net profit growth in the December 2006 quarter. Gillette India reported 85.4% surge in net profit in the December 2006 quarter to Rs 27.71 crore (Rs 14.95 crore). Net sales rose 13% to Rs 131.22 crore (Rs 116.09 crore). The company’s board also declared a liberal interim dividend of Rs 10 per share.
Thirumalai Chemicals plunged 15% to Rs 156, on reporting a net loss in the December 2006 quarter. Thirumalai Chemicals reported a net loss of Rs 1.36 crore in the December 2006 quarter compared to a net profit of Rs 1.60 crore in the December 2005 quarter. Net sales rose 54.5% in the same period to Rs 110.23 crore (Rs 71.33 crore).
UTI Bank advanced 6% to Rs 534. Ratings agency Standard & Poors on Tuesday (30 January) raised the rating on the private bank.
Gujarat Apollo Equipment jumped 8.31% to Rs 228.80, after it reported 48% growth in net profit in the Dec-2006 quarter to Rs 4.80 crore (Rs 3.25 crore). Net sales rose 14% to Rs 33.88 crore (Rs 29.67 crore).
Along with the announcement of Q3 results, the company’s board also recommended a 1:2 bonus issue (a bonus share for two existing ones) on Tuesday (30 January 2007). The company also said it will pursue listing on National Stock Exchange (NSE) on completing the proposed bonus issue.
Areva T&D India jumped 11.41% to Rs 1184.50, on reporting 108.9% surge in net profit for the December 2006 quarter. Areva T&D India reported 108.9% surge in net profit in the December 2006 quarter to Rs 32.22 crore (Rs 15.42 crore). Net sales jumped 15.7% to Rs 400.70 crore (Rs 346.19 crore). The company’s operating profit rose 96.5% to Rs 56.10 crore (Rs 28.54 crore). Sales of continuing business rose 35.4% to Rs 400.70 crore in the Dec-2006 quarter from Rs 295.75 crore in the same quarter a year ago.
Gujarat Mineral Development Corporation jumped 9.60% to Rs 425.20, after reporting a sharp rise in net profit for the December 2006 quarter. The company's net profit surged to Rs 52.65 crore from Rs 1.35 crore in the December 2005 quarter. The surge in net profit was due to a change in deprecation policy. The company's balance sheet shows a credit of Rs 16.98 crore for depreciation in the December 2006 quarter. Net sales rose 17.6% in this period compared to Rs 132.79 crore in the year ago period.
The Nikkei share average dropped 0.61% on Wednesday, as Sony Corp and TDK Corp declined after raising their profit forecasts more cautiously than investors had expected. The Nikkei was down 106.77 points, at 17,383.42.
The Reserve Bank of India (RBI) reviewed its annual monetary policy and found the rate of bank credit growth "clearly excessive." Bank credit is growing at a robust 30%.
The RBI, therefore, hiked its repo rate by 25 basis points to 7.5%. The statement, which was very much on expected lines, left the cash reserve ratio (CRR) and reverse repo rate unchanged at 5.5% and 6%, respectively. The central bank also kept the bank rate unchanged at 6%.
The central bank said its monetary stance will be to ensure price stability and anchor inflation expectations. The RBI said its objective is to bring inflation as close as possible to 5.0-5.5%. Governor Y V Reddy reiterated RBI's committment to adapt to evolving global and domestic situations, which impact inflation and growth.
The central bank added liquidity management will be given top priority in the remaining part of the year. It said it would use all policy instruments at its disposal to regulate money supply.
The government on Wednesday revised upwards its 2005/06 gross domestic product growth estimate to 9% from an earlier 8.4%. Manufacturing output growth was revised to 9.1% for the year to March 2006, from the earlier 9%. Growth in farm output for 2005/06 was pegged at 6% compared to an earlier estimate of 3.9%.
Even the Federal Reserve officials meet later today, and may leave the overnight lending rate unchanged at 5.25%. Fed officials say controlling inflation is a priority than preventing any possible economic weakness.
US stocks rose on Tuesday as a 5.5% jump in oil prices to nearly $57 a barrel sparked a rally in the energy sector, while shares of Motorola Inc gained after investor Carl Icahn said he wanted a seat on Motorola's board.
The Dow Jones industrial average rose 32.53 points, or 0.26%, to end at 12,523.31. The Standard & Poor's 500 Index added 8.20 points, or 0.58%, to finish at 1,428.82. The Nasdaq Composite Index gained 7.55 points, or 0.31%, to close at 2,448.64.
Oil notched up its biggest gain in 16 months on Tuesday, as funds poured fresh cash into the market because of cold US weather and OPEC supply cuts. US crude was trading at $56.71 a barrel early on Wednesday.
posted by SY at 6:47 PM
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