Markets ended a lacklustre week of trade on a flat note. Global cues were positive but political worries in India, kept gains in check. Corporate numbers announced by major Sensex stocks also affected market direction.
The BSE Sensex ended up 7 points or 0.04% to 18,682 this week. The 50-unit S&P CNX Nifty rose 8 points or 0.14% to settle at 5,684.
Markets ended marginally positive on Monday as gains in FMCG majors and ICICI Bank helped offset losses in Infosys and L&T. However, Tuesday the index slipped weighed down by selling pressure in index heavyweight Reliance Industries along with auto and bank shares. Markets pared early gai8ns to end flat once again on Wednesday, on selling pressure in the oil & gas space. Thursday saw the market surging on the back of buying in bank shares on hopes that demand for credit from the retail segment would pick up ahead of the festival season. Benchmark share indices ended lower on Friday, tracking weakness in Europe, with index heavyweight Reliance and bank shares leading the decline.
Back home, inflation rose 7.81% in September from a year earlier as prices of potato, pulses, wheat and sugar soared. The impact of increase in diesel prices is partly reflected in last month’s figures. High speed diesel inflation soared 8.94% after the government increased diesel prices by Rs 5 on September 13.
BSE FMCG index gained 2.6% at 5,902. Consumer durables and bankex added 1-2% each. However, BSE metal index slumped 2.5% at 10,351 as stocks on the Lonson Metal Exchange declined. Realty, oil & gas, capital goods and power were some of the other losers.
Among individual stocks, Mahindra & Mahindra was the Second biggest loser among the Sensex stocks. The stock slipped 3.6% to close at Rs 823 after Credit Suisse downgraded auto maker to “neutral” from “outperform” and recommends investors to switch to Maruti Suzuki India instead.
Tata Motors also ended on a weak note, the stock closed weaker by 0.6% at Rs 269 after the company’s global vehicle sales, including that of Jaguar Land Rover (JLR), declined by 4.5% to 103,656 vehicles in September from the year-ago period. The country’s largest commercial vehicle manufacturer had sold 108,570 vehicles in the same month of previous year.
Reliance ended down 2% at Rs 803 following a disappointing set of numbers. According to reports, the Oil Ministry has informed the Prime Minister's Office (PMO) that it has not given final nod to Reliance Industries' plans to raise natural gas output from the flagging KG-D6 fields as the firm has refused to allow audit of its expenditure by CAG. RIL told analysts there has been “no significant improvement in ground-level decision making” which has impacted the business environment. The country’s largest private sector petroleum company has been peeved with the government for blocking of approvals and non-revision of gas prices produced from its underperforming KG-D6 block.
State Bank of India has reduced the processing fee on home and auto loans by 50 per cent for loans availed from October 17 to December 31. Shares of SBI ended flat at Rs 2,257.
Bharti Airtel added 2.5% at Rs 267. Meanwhile, in a major setback to incumbent telecom operators Bharti Airtel, Vodafone, Idea Cellular, BSNL and MTNL, the Telecom Commission decided all spectrum given to operators in the 900-MHz band would be refarmed to the 1,800-MHz band at the time of renewal of licences, beginning 2014.
ITC - the biggest gainer this week - was up 5% at Rs 298 after reporting a better-than-expected 21% year-on-year growth in net profit at Rs 1,836 crore for the second quarter ended September 2012 on back of higher sales. Analysts on an average had forecast profit at Rs 1,724 crore from the fast moving consumer goods major.
Gains in IT stocks were capped on the back of cautious stance taken by the investors post the second quarter results posted by the sector heavyweight Infosys last week. This week, from the large-cap space HCL Technologies and TCS announced their results.
HCL Technologies reported a year-on-year jump of 78% in net profit at Rs 885 crore for the first quarter of FY 13 ended September 30, 2012. The company, which follows a July-June financial year, said its revenues for the quarter were Rs 6,091 crore, a growth of 31% when compared to the same period last year.
During the September quarter the company won many higher contracts which resulted in the surge in net profit. For the July-September period HCL witnessed a volume growth of 4.5% as against the previous quarter. The stock reacted positively to the results and touched 52-week high of Rs 607.
India's largest IT company, TCS' net profit for the quarter ended September 30, 2012 climbed 49 per cent from a year earlier to Rs 3,434 crore driven by growth across geographies and businesses.
Revenues were up 34 per cent year-on-year at Rs 15,621 crore during the quarter. On a sequential basis, profit after tax and net sales increased by 3.5 per cent and 5 per cent, respectively. However, the stock displayed a muted performance on the street, for the week it slipped 0.6% to close at Rs 1,313.
From the mid-cap IT pack, Mindtree and Persistent Systems posted their second quarter results. Mindtree reported 18.9% quarter-on-quarter (qoq) decline in net profit at Rs 72 crore for the second quarter ended September 2012 due to forex loss. Analysts on an average had expected it at Rs 66 crore. The company also moderated its growth projection for the financial year 2013. The Bangalore-based company, which had earlier projected revenue growth of 11-14 per cent on a par with the Nasscom guidance, today said it was expecting the growth to come down to below 11 per cent.
Persistent Systems from the same pack however, posted etter than expected results reported a rise of 37.8 per cent in net profit at Rs 44.64 crore for the quarter ended September, compared with Rs 32.41 crore in the year-ago period.