L&T drops on profit taking after post-result rally

Key benchmark indices extended losses and hit fresh intraday low in early afternoon trade. The S&P BSE Sensex was down 63.31 points or 0.31%, off 76.64 points from the day's high and up 18.72 points from the day's low. The market breadth, indicating the overall health of the market, was negative. Weakness in Asian stocks hit market sentiment adversely. In the foreign exchange market, the rupee edged lower against the dollar on dollar buying by custodial banks ahead of the Reserve Bank of India's moentary policy review next week.

Index heavyweight and cigarette major ITC extended intraday gain ahead of its Q2 results today, 25 October 2013. Another index heavyweight Reliance Industries (RIL) was just a tad higher after the company said its subsidiary Reliance Jio Infocomm (RJIL) has received Unified License for all 22 service areas across India. Metal and mining stocks edged lower. NMDC fell after reporting weak Q2 result. Engineering and construction giant L&T dropped on profit booking after recent rally triggered by the company reporting strong growth in order inflow in Q2 September 2013 at the time of announcement of its Q2 September 2013 results on 18 November 2013.

Key benchmark indices trimmed initial losses triggered by negative Asian stocks. Volatility continued in mid-morning trade as the key benchmark indices extended losses after staging a recovery from lower level. The barometer index, the S&P BSE Sensex, briefly turned positive to hit fresh intraday high only to once again slip in negative zone. Key benchmark indices extended losses and hit fresh intraday low in early afternoon trade.

Foreign institutional investors (FIIs) bought shares worth a net Rs 991.83 crore on Thursday, 24 October 2013, as per provisional data from the stock exchanges.

At 12:15 IST, the S&P BSE Sensex was down 63.31 points or 0.31% to 20,662.12. The index lost 82.03 points at the day's low of 20,643.40 in early afternoon trade, its lowest level since 23 October 2013. The index rose 13.33 points at the day's high of 20,738.76 in mid-morning trade.

The CNX Nifty was down 28.20 points or 0.46% to 6,136.15. The index hit a low of 6,132.50 in intraday trade, its lowest level since 23 October 2013. The index hit a high of 6,161.95 in intraday trade.

The market breadth, indicating the overall health of the market, was negative. On BSE, 1,274 shares declined and 865 shares gained. A total of 153 shares were unchanged.

The total turnover on BSE amounted to Rs 755 crore by 12:20 IST as compared to Rs 628 crore by 11:20 IST.

Index heavyweight and cigarette major ITC rose 0.92% to Rs 345.70, with the stock extending intraday gain. The stock hit a high of Rs 345.90 and low of Rs 341.85 so far during the day. The company unveils Q2 results today, 25 October 2013.

Index heavyweight Reliance Industries (RIL) rose 0.26% to Rs 886.90. The stock hit a high of Rs 892.30 and low of Rs 879.15 so far during the day. RIL during market hours today, 25 October 2013, said its subsidiary Reliance Jio Infocomm (RJIL) has received Unified License for all 22 service areas across India. RJIL has thus become the first telecom operator in the country to get pan India Unified License. The Unified License would allow RJIL to offer all telecom services including voice telephony under a single license.

With grant of Unified License, RJIL has migrated its existing ISP license along with Broadband Wireless Access (BWA) spectrum to the Unified License with authorisation for all services except Global Mobile Personal Communication by Satellite Service (GMPCS) under Unified License in all service areas, RIL said in a statement.

Metal and mining stocks edged lower. Jindal Steel & Power (down 1.52%), Hindustan Zinc (down 0.67%), National Aluminium Company (down 1.12%), Tata Steel (down 2.38%), Sail (down 1.23%), and Hindalco Industries (down 3.67%), declined. Sesa Sterlite rose 0.4%.

NMDC lost 4.14% after net profit declined 21.46% to Rs 1318.36 crore on 5.53% fall in total income to Rs 3018.29 crore in Q2 September 2013 over Q2 September 2012. The company announced result after market hours on Thursday, 24 October 2013.

The company's production of iron ore rose over 10% to 5.94 million tonnes (MT) while sales of iron ore rose about 11% to 6.50 MT in Q2 September 2013 over Q2 September 2012.

NMDC said that it has planned capital expenditure of Rs 2720 crore including Rs 100 crore for overseas acquisitions for the year ending 31 March 2014. So far, the capital expenditure of Rs 1125 crore has been incurred.

The installation of 3 MTPA steel plant at Nagarnar in Chhattisgarh, as part of NMDC's forward integration programme and value addition, is being pursued vigorously. Orders for major technological packages have already been placed, other auxiliary packages are in advanced stages of finalization and construction works of the major packages are being undertaken on war footing, the company said.

As part of its expansion programme, NMDC is developing two new mines, one in Bailadila Sector in Chhattisgarh i.e. Deposit-11B Iron Ore Project and the other in Bellary-Hospet region in Karnataka i.e. Kumaraswamy Iron Ore Mine. Besides, orders have already been placed for setting up of 1.2 MTPA capacity Pelletisation plant in Karnataka.

C.S. Verma, CMD of NMDC said, "NMDC is gearing up to ramp up its production and dispatches vigorously which is evident from these results. Inspite of adverse conditions, NMDC has outperformed by showcasing growth in both production and dispatches. The resilient nature of NMDC would ensure to cope up with the challenges and would create new opportunities for sustainable growth."

Unichem Laboratories rose 3.3% after the company said it has received the consideration amount of Rs 160.50 crore of the sale proceeds from the sale of its Indore SEZ Plant. The announcement was made during trading hours today, 25 October 2013. It may be recalled that Unichem Laboratories' board of directors at its meeting held on 15 February 2013 had approved the sale of Indore SEZ Plant to Mylan Laboratories and members of the company had approved the sale on 29 March 2013 through postal ballot.

Shares of engineering and construction giant L&T dropped on profit booking after recent rally triggered by the company reporting strong growth in order inflow in Q2 September 2013 at the time of announcement of its Q2 September 2013 results on 18 November 2013. The stock was off 1.93% at Rs 946. L&T on Friday, 18 October 2013, said its recurring profit after tax rose 7% to Rs 978 crore on 10% growth in gross revenue at Rs 14648 crore in Q2 September 2013 over Q2 September 2012. The company attributed top line growth to pick-up in execution of various jobs.

In the foreign exchange market, the rupee edged lower against the dollar on dollar buying by custodial banks ahead of the Reserve Bank of India's moentary policy review next week. The partially convertible rupee was hovering at 61.60, compared with its close of 61.46/47 on Thursday, 24 October 2013.

Asian markets declined on Friday, 25 October 2013, as forecasts from Canon Inc. to Posco disappointed investors. Key benchmark indices in Taiwan, Hong Kong, China, Singapore, Japan, Indonesia and South Korea fell by 0.19% to 2.75%.

South Korea's economic growth maintained the same robust pace in the third quarter as the preceding quarter, beating market expectations and bolstering hopes that Asia's fourth-largest economy stays on a recovery track. Gross domestic product rose a seasonally adjusted 1.1% in the July-September period from the previous quarter, when the economy grew at the same pace, the Bank of Korea said Friday. That is the strongest pace since the first quarter of 2011, when the economy grew 1.3% on quarter. On a year-on-year basis, the economy expanded 3.3% in the third quarter, accelerating from the second-quarter's 2.3% gain.

Trading in US index futures indicated that the Dow could fall 31 points at the opening bell on Friday, 25 October 2013. US stocks climbed on Thursday, with the S&P 500 gaining a day after halting a run to a record high, as economic data underscored views US monetary stimulus will be in place for long time.

The preliminary reading of Markit's US flash manufacturing purchasing managers index slipped to 51.1 in October from 52.8 in September, the lowest level for a year. Readings above 50 indicate expansion and the PMI in October signals only modest manufacturing growth.

The Federal Open Market Committee (FOMC) holds a two-day policy meeting on 29-30 October 2013. On 18 September 2013, the Fed surprised economists and investors with its decision to delay scaling back its stimulus amid concerns about the strength of the economic recovery.

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