Markets breaks the consolidation mood;surges by around a percent

Breaking the consolidation mood, the Indian equity markets moved higher on Tuesday, it was mainly the export driven IT and technology stocks that helped the markets to recover from their initial somberness. The start of the local shares was on an unimpressive flat note, tailing the weakness in the global markets after the US indices closed lower overnight and most of the Asian markets started in red. US government's borrowing debt limit debate remained at a standstill in Washington and the Treasury Department stated that in order to avoid the government risks in defaulting on its debt the limit must be raised by August 2. Apart from the US concern there was worry that European leaders will fail to agree on steps to contain the region's crisis that weighed on the Asian markets. Back home, the trade remained lack luster and range bound till the mid morning session, lacking any supportive cues, but as soon as the European markets made a positive opening, the domestic markets morale got boosted and they started moving higher. The European stocks gained, rebounding from a seven-month low, supported by good gains in companies like Novartis AG and International Business Machines Corp. on reporting earnings that beat estimates.

Back home, after breaking their early sluggishness benchmark equity indices moved higher in the noon trade on getting active support from the consumer durables, IT and tech sector. The broader indices remained the consistent performer throughout the day. Though there was no major trigger but the traders opted to go for value picking and fundamentally strong shares witnessed good buying. The beaten down gauge of IT made a bounce back on hopes that business environment outlook may be better than expected. Infosys that has been languishing in red since its first quarter numbers, moved higher by around one and half a percent, while its other peers TCS, Tech Mahindra, Mphasis too gained over a percent after their global counterpart IBM beat analyst expectation and boosted its full-year profit forecast. The other remarkable recovery in latter part of the trade was seen as a turnaround in the realty sector, as after languishing at the bottom in early trade it suddenly spiked up in second half to emerge as one of the top gaining sectoral gauges, supported by gains in heavyweights like DLF, Unitech, Orbit Corp etc. The BSE Sensex slightly missed the 18700 mark in its intraday trade while the Nifty sailed past the 5600 mark and after some last minute profit booking the benchmarks closed with gains of three-fourth of a percent. The total traded volume crossed 1.13 lakh crore mark, higher than the previous session.

Result season is on and the result announcement kept the markets buzzing, the second largest private sector lender HDFC Bank closed lower by about a percent despite posting good numbers, its net profit surged by 33.75% to Rs 1,085 crore for the first quarter ended June, 2011. On the same time Ashok Leyland got punished on reporting a decline of 30% in its first quarter to Rs 86.25 crore due to high raw material costs and surge in financial expenses. Other company that disappointed the street was Crompton Greaves whose consolidated net profit fell sharply by 58.36% to Rs 79.47 crore for quarter ended June 2011 against Rs 190.85 crore in the corresponding quarter a year ago. The stock plunged by over 14% after the numbers. Other stocks, like Cadila Healthcare, NIIT Technology too were punished on reporting lower than expected numbers.

Finally, the BSE Sensex gained 146.83 points or 0.79% to settle at 18,653.87, while the S&P CNX Nifty rose by 46.50 points or 0.84% to close at 5,613.55.

The BSE Sensex touched a high and a low of 18,690.42 and 18,481.83, respectively. The BSE Mid cap and Small cap indices were up by 0.41% and 0.82% respectively.

The top gainers on the Sensex were DLF up 2.09%, Sterlite Inds up 1.77%, Tata Power up 1.62%, SBI up 1.59% and Infosys up 1.45%.

On the flip side, Tata Motors down 3.16%, Hero Honda down 1.22%, Maruti Suzuki down 0.79%, HDFC Bank down 0.70% and Hindustan Unilever down 0.42% were the top losers on the index.

The top gainers on the BSE sectoral space were Consumer Durables (CD) up 1.42%, IT up 1.17%, TECk up 1.16%, Realty up 1.12% and Metal up 0.90%, While Auto down 0.43%, Power down 0.26% and Capital Goods (CG) down 0.13% was the only losers on the BSE sectoral space.

Meanwhile, the imports of sensitive items for the last financial year increased by 7.8% to Rs 70,656 crore from Rs 65,565 crore during the 2009-10. During the 2010-11, the gross import of all commodities increased by 17.1% over 2009-10. The other items like milk and milk products, food grains and rubber saw the surge in imports, it increased by 162.2%, 113.8% and 82.7% respectively during the last financial year.

The commerce and industry ministry said the gross import of all commodities during same period of current year was Rs 1596869 crores as compared to Rs 1363736 crores during the same period of last year. Thus, import of sensitive items constitutes 4.8% and 4.4% of the gross imports during last year and current year respectively.

The import of items like pulses, cotton and silk, spices and tea and coffee register decline in import at broad group level, however items like edible oil, automobiles, fruits and vegetables (including nuts), rubber, products of SSI, milk and milk products, alcoholic beverages, marble and granite and food grains saw the increase in imports for the 2010-11.

As per the official statement, during the last financial year edible oil increased to Rs 29,319.1 crore from Rs 25,975.3 crore in the 2009-10.  A significant feature of edible oil import is that import of crude oil has gone up by 15.8% and that of refined oil have gone down by 2.5%. The increase in edible oil import is mainly due to substantial increase in import of crude palm oil and its fractions, the commerce ministry said.

Import of sensitive items has increased from countries like Indonesia, China P RP, Argentina, Malaysia, Korea RP, Germany, Ukraine, Thailand, Tanzania REP, Australia, United Kingdom, Cote D' Ivoire, Vietnam SOC REP etc. whereas imports of sensitive items has reduced from countries such as  US, Myanmar, Brazil, Japan, Canada, Czech Republic etc. 

The S&P CNX Nifty touched high and low of 5,627.65 and 5,557.20, respectively.

The top gainers of the Nifty were Kotak Bank up 2.61%, DLF up 2.30%, Sterlite up 2.02%, Sun Pharma up 1.86% and Cairn up 1.70%.

On the flip side, Tata Motors down 1.60%, Hero Honda down 1.20%, Maruti down 1.13%, HDFC Bank down 0.79% and Hindustan Unilever down by 0.71% were the top losers on the index.

The European markets were trading in green. France's CAC 40 surged 1.28%, Britain's FTSE 100 up by 0.43% and Germany's DAX soared by 1.41%.

Most of the Asian equity indices finished the day's trade in the negative terrain on Tuesday tracking weak global cues as the euro-zone debt crisis roared on while lawmakers in Washington remained deadlocked on an agreement to avoid a US default.  Japanese Nikkei fell over 0.80 percent as banks were sold on growing investor frustration with governments' inability to solve debt crises in the United States and Europe while, Chinese Shanghai eased 0.70 percent on Tuesday, weighed down by a pull-back in financial issues following news of China Merchants Bank's fundraising plans.

Asian Indices	Last Trade	Change in Points	Change in %
Shanghai Composite	2,796.98	-19.71	-0.70
Hang Seng	21,902.40	97.65	0.45
Jakarta Composite	4,023.42	-9.56	-0.24
KLSE Composite	1,555.64	-6.94	-0.44
Nikkei 225	9,889.72	-84.75	-0.85
Straits Times	3,096.12	17.17	0.56
Seoul Composite	2,130.21	-0.27	-0.01
Taiwan Weighted	8,524.57	-14.00	-0.16

 

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