Post session - Quick review

Local equity markets staged a magnificent rally on Friday as Greece's prime minister canned plans for a referendum on the country's aid package, likely preventing the collapse of last week's euro zone bailout plan.  Indian equity markets advancing for the first out of the five sessions on Friday reversed four straight days of losses starting Monday, which were observed post George Papandreou rattled financial markets by unexpectedly announcing a referendum on a European austerity plan that aimed at restoring the country’s solvency. However, the rally which was nothing short of being spectacular, came after Greece scrapping a referendum on a bailout plan, moved the debt ridden nation closer to receiving aid, which as a result soothed flexed nerves.

Market men who were sitting on their hands from past few sessions scurried to buy equities post Greek Prime Minister George Papandreou bowed to cabinet rebels and agreed to step down and make way for a negotiated coalition government. Papandreou however, in return asked for Socialist lawmakers back him in a confidence vote on Friday, raising hopes for a political consensus on the EU rescue framework. George Papandreou said, “a referendum would not have to be held if the Greek opposition backed the rescue package hammered out by European leaders last Thursday”.Meanwhile, investor confidence was also boosted by a surprise rate cut by the European Central Bank.  European Central Bank, much to investor’s delight, pruned the key lending rate to 1.25%, thereby reducing concerns over debt crisis spurring a credit crunch.

Back home, quarterly earnings were mixed bag as HCL Infosystems slumped over 4% after the company’s net profit plunged 74 percent as its flagship computer retailing business suffered in an economic slowdown worsened by lesser government investment in computing and office automation business. The July-September quarterly net profit of the company plunged 74.39% at Rs 12.15 crore against Rs 47.46 crore for the corresponding period last year. Meanwhile, Marico too surrendered over 0.10% on reporting muted growth in second quarter bottom line. The company’s net profit for the quarter under review rose 33.91% at Rs 79.89 crore as compared to Rs 59.66 crore for the quarter ended September 30, 2010. Its net sales have increased by 33.74% to Rs 718.34 crore for the quarter under review from Rs 537.11 crore for the similar quarter of the previous year.

On the flip side, Bharti Airtel captured gains of over 1.25% despite India's top mobile phone carrier, posted a bigger-than-expected 38 percent fall in fiscal second-quarter profit, hit by higher interest costs and losses on foreign exchange and in its African operations. Bharti last year ventured into Africa by acquiring most of the African mobile operations of Kuwait's Zain in a $9 billion debt-funded deal, becoming the world's fifth-biggest mobile carrier by subscribers. The company’s net profit for the quarter under review declined 37.75% at Rs 1307.50 crore as compared to Rs 2100.30 crore for the quarter ended September 30, 2010.  Meanwhile, Ashok Leyland gained even after the company’s net profit for the quarter under review declined 7.77% at Rs 154.08 crore as compared to Rs 167.06 crore for the quarter ended September 30, 2010.

Meanwhile, PSU oil marketing companies viz. IOC, BPCL and HPCL were in jubilant mood after implementing another rate hike in petrol prices. Oil companies’ decision to increase petrol prices by Rs 1.82 per litre came on the heels of food inflation "dangerously" rising to 12.21 per cent for the week ended October 22. This was the fourth hike in prices this year. Petrol will now cost Rs 68.84 a litre, Rs 71.16 a litre in Chennai, Rs 73.71 in Mumbai and Rs 71.98 in Kolkata and Rs 75.64 in Bangalore. Oil marketing companies had earlier hiked petrol prices by Rs 3.14 a litre on September 16, when the rupee was ruling at about Rs 48 per US dollar.

 However, the rally which was exceptional in the early trade ebbed out a bit as trader’s hit sales post Finance Minister Pranab Mukherjee on Friday said the recent hike in petrol prices will have some impact on inflation, which is currently hovering close to the double-digit mark. Some traders also booked out profit owing to the prevailing uncertainties over whether the measures can really be implemented to rescue Greece from its debt crisis. However, the closing of Indian equity markets heartened investor’s

On the global front, US stocks closed higher on Thursday, with all three major indices bouncing back in the green, after Greece dropped voting on its financial rescue and the European Central Bank unexpectedly lowered interest rates. Meanwhile, Asian shares too ended in euphoric mood. Moreover, European Stocks rose before Greek vote. Greek Prime Minister George Papandreou is facing a confidence vote in parliament today that will determine whether he survives or elections are called. Papandreou reached out to the opposition about setting up a transitional government, indicating an accord would secure aid and remove the need for a referendum on euro membership.

On the home turf, stocks from Metal, Capital Goods, Realty counters pushed 30 share barometer index-Sensex- on BSE over 50 points to end the trade above 17500 level. Similarly, barometer index-Nifty- on NSE-gaining over 15 points concluded the trade sub 5400 level.The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1506:1279 while 191 scrips remained unchanged.

The BSE Sensex gained 80.68 points or 0.46% and settled at 17,562.61. The index touched a high and a low of 17,702.26 and 17,474.39 respectively. 21 stocks advanced against 9 declining ones on the index (Provisional)

The BSE Mid-cap index gained 0.75% while Small-cap index was up 0.38%. (Provisional)

On the BSE Sectoral front, Metal up 1.64%, Capital Goods up 1.03%, Realty up 0.80%, TECk up 0.70% and Bankex up 0.62% were the top gainers while Oil & Gas down 0.31% was the only losers.

The top gainers on the Sensex were Hero MotoCorp up 2.61%, Hindalco up 2.43%, Sterlite up 1.90%, Sun Pharma up 1.81% and Jindal Steel up 1.67%.

On the flip side, Tata Power down 1.85%, HUL down 0.81%, RIL down 0.74%, Maruti down 0.71% and Tata Motors down 0.29% were the top losers on the index. (Provisional)
Meanwhile, the government owned oil marketing companies (OMCs) have increased petrol prices by Rs 1.80 per litre to wipe off their losses on the decontrolled fuel. This is the 4th hike in the current financial year, because of recent deprecation in rupee, which increased the cost of imported crude oil. Prices at Indian Oil outlets, country’s largest oil marketer has already increased, whereas other two OMCs i.e. Bharat Petroleum and Hindustan Petroleum will increase prices from today midnight.

After the hike, petrol will cost around Rs 68.64 per litre in Delhi, Rs 73.81 in Mumbai, Rs 73.15 Kolkata and Rs 72.73 in Chennai. The hike has been implemented to pass on the impact of a depreciating rupee that has resulted in a higher cost. The last time petrol price was hiked was on September 15, when companies raised prices by a steep Rs 3.14 per litre.

‘We were losing around Rs 1.50 litre. The increase of up to Rs 1.91 has been done after factoring the local levies. The increase takes care of the entire loss on petrol,’ an Indian Oil official said.

In September, rupee has depreciated by 3.34%, which pushed OMCs to go for another hike in petrol price. From the time of deregulation of petrol prices 17 months ago, petrol prices have increased by 43% to Rs 68.64 per litre in Delhi. In the same period of time, the diesel prices, which is still under government control has increased by only 8.37% to Rs 41.29 per liter on national capital.

However, the petrol price were decontrolled in line with the Kirit Parikh panel report, the government is yet to take decision on its suggestion of decontrolling diesel prices. Presently, the OMCs are losing around Rs 8.58 on a litre of diesel, Rs 25.66 on per litre kerosene and Rs 260.50 on a domestic LPG cylinder.

India VIX, a gauge for market’s short term expectation of volatility lost 4.98% at 23.43 from its previous close of 24.66 on Thursday. (Provisional)

The S&P CNX Nifty gained 17.60 points or 0.33% to settle at 5,283.35. The index touched high and low of 5,326.45 and 5,256.80 respectively. 27 stocks advanced against 23 declining ones on the index. (Provisional)

The top gainer on the Nifty were, Ambuja Cement up 2.77%, Hero MotoCorp up 2.54%, Hindalco up  2.47%, Cairn India up 2.18%  and Sun Pharma up 2.03%.

 On the other hand, Ranbaxy down 2.08%, Tata Power down 2.04%, Reliance Infra down 1.84%, Dr. Reddy down 1.27% and Sesa Goa down 1.14% were the top losers. (Provisional)

The European markets are trading in green, with France's CAC 40 up 0.22%, Germany's DAX up 0.09% and FTSE 100 up 0.68%.

Asian markets witnessed jubilant run on last trading day of the week after Greece backed away from a proposed referendum that threatened its membership in the euro. Also boosting sentiment was Europe’s quarter-point cut to 1.25%, announced by the central bank's new President Mario Draghi. The move took markets by surprise and indicated that the central bank will focus on supporting growth, even in the face of elevated inflation. Meanwhile, Seoul Composite surged the most, up by over two percent point supported by rallies in technology issues and refiners. Moreover, Chinese benchmark ended up by 0.81 percent on Friday and 2.2 percent for the week, supported by expectations that the government was prepared to fine-tune macroeconomic policies as economic growth slows and by ample liquidity in the financial system.