Local bourses make soft opening; Infosys disappoints

After exhibiting splendor session, key benchmarks have made a soft start led by losses in IT major Infosys. Shares of the software bellwether tanked nearly eight percent in opening trades after the country’s second-ranked software services provider lowered its revenue guidance for the current fiscal 2013 in dollar terms. Meanwhile, the company, on the consolidated basis, posted a rise of 24.29% in its net profit at Rs 2369.00 crore for the quarter ended September 30, 2012 as compared to Rs 1906.00 crore for the same quarter in the previous year.

The global cues remain mixed as the US markets closed flat with a negative bias on Thursday, though the jobless claims dropped to its lowest level since 2008 that suggested hiring may be picking up but the decline in the technology sector weighed down due to a slide in Apple shares. While, Asian counters too were exhibiting the mixed trend at this point of time. Though, some of the indices were maintaining their gains on good data from US and as a day after Japanese Prime Minister Yoshihiko Noda warned that without negotiations Asia’s two biggest economies would suffer, China and Japan agreed to hold talks over a territorial dispute that has disrupted trade.

Back home, all eyes are on IIP data for the month of August to be released later in the day and economists are expecting it to stabilize near one percent mark after posting a negligible 0.1 percent growth in July, as the core sector data too had came weak. On the sectoral front, healthcare witnessed the maximum gain in trade followed by fast moving consumer goods and metal while, software, technology and capital goods remained the top losers on the BSE sectoral space. The broader indices were outperforming benchmarks while, the market breadth on the BSE was positive; there were 1,020 shares on the gaining side against 594 shares on the losing side while 66 shares remain unchanged.

The BSE Sensex opened at 18,727.10; about 77 points lower compared to its previous closing of 18,804.75, and has touched a high and a low of 18,758.57 and 18,696.10 respectively.

The index is currently trading at 18,732.99, down by 71.76 points or 0.38%. There were 18 stocks advancing against 12 declines on the index.

The overall market breadth has made a strong start with 60.71% stocks advancing against 35.36% declines. The broader indices however, were outperforming benchmarks; the BSE Mid cap and Small cap indices rose 0.55% and 0.54% respectively.

The top gaining sectoral indices on the BSE were, HC up by 0.73%, FMCG up by 0.67%, Metal up by 0.60%, Power up by 0.58% and CD up by 0.57% while, IT down by 4.01%, TECk down by 2.92% and CG down by 0.19% were the only losers on the index.

The top gainers on the Sensex were GAIL up by 1.39%, Tata Power up by 1.23%, Cipla up by 1.14%, Tata Steel up by 1.11% and Jindal Steel up by 0.76%.

On the flip side, Infosys was down by 7.33%, Wipro was down by 1.67%, TCS was down by 0.75%, L&T was down by 0.63% and Tata Motors was down by 0.46% were the top losers on the Sensex.

Meanwhile, Cabinet Committee on Economic Affairs (CCEA) on Thursday agreed to hike the prices of urea-based fertilizers by Rs 50 per tonne, thereby reducing government’s fertilizer subsidy bill, estimated to touch Rs 65,000 crore this fiscal year. With this hike, urea-based fertilizers will now cost Rs 5,360 per tonne, way cheaper than potash and phosphate fertilizers, which cost Rs 24,000 per tonne. Earlier, urea was priced at 5,310 rupees per tonne.

Further, the Cabinet has also approved modified direct cash subsidy for urea, a move that would ensure transfer of direct cash subsidy to the farmer for procuring urea. Thus with this, the payment of fertilizer subsidy to companies will be based on the receipt of fertilizers and the acknowledgement of receipts of fertilisers by the retailers (last point of sale of fertilizers).

However, the government plans to go about the process in a phased manner. In the first phase, the government will track sales of urea up to the dealer level. This exercise will be made compulsory from November 1, 2012.

Further, the Cabinet has directed the ministry to commence a pilot project in the second phase in 10 districts of the country and begin tracking the sale of urea right down to the farmer. This will be tracked through ICT enabled tools, and identification of the farmers will be done through the Kisan Credit Card, Aadhaar No, Bank Account No. etc. After making sure that there is no provision of any direct cash subsidy at this stage, transfer of direct cash subsidy will become a reality only in the third and the final stage of the roll-out.  However, the cabinet has yet not given time-frame for the completion of this pilot project.

The S&P CNX Nifty opened at 5,681.70; about 27 points lower as compared to its previous closing of 5,708.05, and has touched a high and a low of 5,696.25 and 5,659.35 respectively.

The index is currently trading at 5,688.35, down by 19.70 points or 0.35%. There were 33 stocks advancing against 17 declines on the index.

The top gainers of the Nifty were Ambuja Cement up by 2.49%, Lupin up by 2.03%, ACC up by 1.30%, BPCL up by 1.30% and Tata Power up by 1.28%.

On the flip side, Infosys down by 7.59%, Wipro down by 1.54%, HCL Tech down by 1.19%, DLF down by 1.18% and L&T down by 0.82%, were the major losers on the index.

Asian markets were trading mixed; Shanghai Composite was down by 8.80 points or 0.42% to 2,094.06, Kospi Composite was lower by 4.03 points or 0.21% to 1,928.86, Nikkei 225 was down by 2.59 points or 0.03% to 8,544.19 and Taiwan Weighted plunged by 44.96 points or 0.60% to 7,406.55.

On the other hand, Hang Seng was up by 106.58 points or 0.51% to 21,105.63, Jakarta Composite gained 16.40 points or 0.38% to 4,301.94, KLSE Composite was marginally up by 1.26 points or 0.07% to 1,656.70 and Straits Times was up by 6.19 points or 0.21% to 3,039.00.