Post Session: Quick Review

Reversal of trend in the noon deals led to a positive close for benchmark equity indices on the result heavy session at Dalal Street. Lacking any cues from global front, gains of index heavyweights such Reliance Industries, TCS and L&T mainly spelled optimism in Indian equity markets, which after getting a negative start, mustered quite a lot of gains to conclude in vicinity of high point of the day. With the start of F&O expiry week, 30 share index, Sensex, accumulated over 100 points, to conclude above the 18700 mark. Similarly, the widely followed index, Nifty, also puffed up gains of over quarter points to conclude above the psychological 5700 mark. However, broader indices exhibited a mixed close. Meanwhile, trade of over Rs 1.7 lac crore was done in terms of volume turnover (Provisional)

On the global front, Asian pacific shares staged a mixed close, with poor U.S. earnings weighing on the sentiment. Additionally dismal Japan’s exports data too added to the pessimistic milieu. Data released on Monday showed Japan posted a Y558.6 billion trade deficit in September, slightly wider than the Y547.9 billion deficit expected. Exports to China dropped 14.1% on-year amid the latest territorial flare-up between Tokyo and Beijing, sharper than the previous month's 9.9% decline and marking the fourth consecutive month of contraction. Meanwhile, European shares paring early losses turned positive on Monday, as renewed expectations that Spain was moving closer to seeking a bailout eclipsed worries over corporate results.

Back home, Capital Goods, Bankex, Health Care and Information Technology stocks, emerging as top buyer’s mainly fueled the rally. Hopes that Reserve Bank of India would call for rate cut in its upcoming second quarterly monetary policy review beefed up banking shares while, IT stocks rose across the board after TCS' strong Q2 results. On consolidated basis, the company has posted a rise of 49.25% in its net profit at Rs 3434.37 crore for the quarter ended September 30, 2012 as compared to Rs 2301.00 crore for the same quarter in the previous year.

On the flip side, Fast Moving Consumer Goods, Auto and Consumer Durable counters, were the weak link of the trade. Metal shares, viz, Sesa Goa, Sterlite Industries, etc, dropped tracking weakness in industrial metals. LMEX, a gauge of six metals traded on the London Metal Exchange fell 2.37% on Friday, 19 October 2012.

On the result front, there were more misses than hits. The largest disappointment came from Bank of Baroda stocks which plummeted over a percentage and half on NPA concerns. Public sector lender Bank of Baroda has reported better-than-expected numbers in the quarter ended September 2012 but the non-performing assets (NPAs) increased during the quarter. Gross non-performing assets (NPAs) jumped 72 per cent year-on-year to Rs. 5,879 crore.

Additionally, Syndicate Bank too succumbed to profit booking despite reporting 43.48% jump in net profit to Rs 463.37 crore during the second quarter of this fiscal. Moreover, South Indian Bank took it on chin after reporting over four fold rise in Net Performing Assets (NPAs). However, the bank reported a rise of 2.32% in net profit of Rs 97.15 crore for the quarter ended September 30, 2012. Furthermore, HDFC Bank’s stock too took a knock of over half a percent after the country’s biggest mortgage lender reported flat profit for the July-September quarter. Standalone net profit for the fiscal second quarter was at Rs 1151 crore compared with Rs 971 crore a year ago.

On the flip side, Engineering conglomerate Larsen & Toubro (L&T) galloped gains of over two percentage on reporting a growth of 42.5 percent year-on-year in its net profit of Rs 1,137 crore for the quarter ended September 2012, helped by an exceptional gain.

The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1380:1462 while 134 scrips remained unchanged. (Provisional)

The BSE Sensex gained 110.15 points or 0.59% and settled at 18,792.46. The index touched a high and a low of 18,809.28 and 18,600.88 respectively. 20 stocks were seen advancing while 10 stocks were declining on the index (Provisional)

The BSE Mid-cap index was down by 0.22% while Small-cap index was up 0.35%. (Provisional)

On the BSE Sectoral front, Capital goods up 1.39%, Health Care up 1.07%, Bankex up 0.95%, IT up by 0.91% and TECk up by 0.80%were the top gainers, while Consumer Durable down by 0.69%, FMCG down by 0.61%, Auto down by 0.20%, PSU down by 0.09% and Metal down by 0.07% were the top losers in the space.

The top gainers on the Sensex were L&T up 2.35%, TCS up 2.31%, Bharti Airtel up by 2.08%, NTPC up by 1.80% and ICICI Bank up 1.78%, while, Jindal Steel down by 1.88%, ITC down by 1.53%, Hero MotoCorp down by 1.27%, Sterlite Industries down by 1.15% and Tata Motors down by 0.71% were the top losers in the index. (Provisional)

Meanwhile, amid wide protests for the spectrum refarming, which has reappeared this week in India’s telecom radar after a brief lull the Empowered Group of Ministers (EGoM) on spectrum pricing has deferred the decision to refarm spectrum, by reasoning lack of time and urged operators to vacate the 900 MHz spectrum for the less-efficient 1800 MHz airwaves.

The ministerial group has decided to levy a one-time fee to be calculated from 2008 from companies that hold spectrum beyond 6.2 MHz. The centre will procure about Rs 10,000 crore from this plan. Other than the private telecom giants Airtel and Vodafone, state-owned MTNL and BSNL will also get impacted. The telecom minister Kapil Sibal has indicated that the decision on the refarming issue is likely to be taken a week prior to the start of the auction. While Centre has strongly suggested that the prices should not reflect the new demand conditions for the prized spectrum and urged to price on the basis of the November 2012 auctions.

Even though, the telecom operators  have come up with opposition to this as they argue that it will cost them more than Rs 1,00,000 crore each to reinstall 900 MHz band, as also building more mobile masts and replacing some of the existing gears for ensuring continuous services.

However, the ministerial group has given off to its earlier decision to levy about Rs 27,000 crore surcharges on the 2G spectrum held by existing operators. The panel has recommended that the GSM-based telecom companies are to pay for airwaves beyond 4.4 MHz at the auction-determined price, while CDMA carriers pay for holdings beyond 2.5 MHz Hence, the telecom firms, including Bharat Sanchar Nigam, Bharti Airtel, Vodafone, Idea Cellular, Reliance Communications and others, might have to pay about Rs 27,517 crore. Out of this, GSM players would be levied with Rs 18,000 crore and CDMA operators Rs 9,500 crore.

India VIX, a gauge for markets short term expectation of volatility lost 10.31% at 13.04 from its previous close of 14.54 on Friday. (Provisional)

The S&P CNX Nifty gained 30.40 points or 0.53% to settle at 5,714.65. The index touched high and low of 5,721.55 and 5,658.05 respectively. 33 stocks advanced against 17 declining ones on the index. (Provisional)

The top gainers on the Nifty were JP Associates was up 2.62%, L&T up 2.27%, TCS up 2.26%, NTPC up 2.10% and Bharti Airtel was up 1.93%. On the other hand, Bank of Baroda down 2.06%, Jindal Steel down by 1.99%, Hero MotoCorp down by 1.67%, ITC down by 1.61% and Ambuja Cement down by 1.43% were the top losers. (Provisional)

The European markets were trading on a mixed note with, France’s CAC 40 up 0.26%, Germany’s DAX down 0.04% and the United Kingdom’s FTSE 100 up 0.12%.

Asian shares closed mixed on Monday on profit booking after last week's healthy gains, which came because of data indicating China's economy will pick up in coming years. Moreover, heavy losses on Wall Street pressurized the markets to an extent. Japan’s Nikkei ended marginally up saddled by widening of trade deficit in September. Japan’s Finance Ministry said exports plummeted 10 percent last month from a year earlier, hurt by financial and debt problems in Europe, and a surge in anti-Japanese sentiment in China. Shanghai Composite went home with green mark ahead of key corporate earnings this week, while Hong Kong's Hang Seng index closed in positive territory. However, Seoul shares ended marginally down, followed by downbeat earnings from U.S. firms and worries over a fragile global economy.