SENSEX 16751.73 +12.72
NIFTY 5046.25 -02.35
USD/INR 0050.09 -00.13
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UPDATEDTIME 09.28 PM 23 JANUARY 2012
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The National Stock Exchange's Nifty ended a lackluster session on a flat
note due to lack of supportive cues from global peers and ahead of Reserve Bank
of India's policy meet Tuesday. Profit booking in index heavy-weight Reliance
Industries after lower-than-expected earnings added to the woes.
According to analysts, the central bank may keep interest rates unchanged while it may cut cash reserve ratio (CRR) by 25 basis points.
"We expect the Reserve Bank of India to keep the repo rate unchanged on January 24. While our earlier expectations were that the RBI would begin the repo rate cutting cycle in January, the stickiness of core inflation in the December WPI print has meant that the RBI will likely postpone the first rate cut to March in our view. This is also overwhelmingly the consensus view.
We expect the RBI to ease liquidity through a cash reserve ratio (CRR) cut of 25 bp. We put the probability of a 25-bp CRR cut at 60%, with a chance that the RBI may opt for a 50-bp cut.
The benchmarks are witnessing some resistance at higher levels after a sharp upmove since the beginning of 2012. Analysts are of the view that the market has factored in a lot of negative news last year and is now reacting positively to IIP data, inflation and earnings reports.
"Last year we got almost every bad news or wrong news on the fundamentals that you needed to sell down this market. This year, at least the beginning of the year, has been good where you had a good month of IIP numbers, inflation numbers and a lot of the earnings which have come till now have been quite okay.
One thing to note here is that at the end of calendar year 2011, markets were trading at just about 12 times one year forward numbers. 12 times does factor in a lot of negativity that we keep on talking about on a regular basis.
At some point valuations stop reacting to any kind of downside news and that is what markets have done because of which any good news is now getting well cheered up by the markets what we have seen in the last three weeks.
The National Stock Exchange's Nifty closed 5046.25, down 2.35 points or 0.05 per cent. The broader index touched a high of 5059.55 and low of 5021.35 intraday.
The Sensex ended at 16751.73, up 12.72 points or 0.08 per cent. The 30-share index touched a high of 16784 and low of 16659.32 in trade today.
Nifty is going to be range bound because there are opposing forces, which are coming down. Stocks like Reliance, Infosys and now the mid-cap guys will continue to do more catch-up.
The size of the moves will become smaller unless of course the global rally picks up further steam and 5100 gets crossed. Then you should fairly quickly run up to 5350-5400. Till then you should be here in this 5000-5100 range for a few days.
BSE Midcap Index was up 0.06 per cent and BSE Smallcap Index moved 0.27 per cent higher.
Amongst the sectoral indices, BSE Metal Index was down 2.06 per cent, BSE Oil&gas Index declined 1.66 per cent and BSE Healthcare Index slipped 0.10 per cent. BSE FMCG Index was up 0.83 per cent, BSE Realty Index gained 0.82 per cent and BSE Capital Goods Index moved 0.77 per cent higher.
Sterlite Industries (-6.01%), Hindalco Industries (-4.91%), Hero MotoCorp (-4.18%), Kotak Bank (-3.98%) Coal India (-3.19%) and Reliance Industries (-2.61%) were the major Nifty losers.
Shares of Reliance Industries were witnessing selling pressure after the company reported lower-than-expected quarterly results. Its net profit dipped to Rs 4440 crore for quarter ended December 2011 vs 5136 crore in the same quarter a year ago. The net profit is below street expectations of Rs 4500-4700 crore.
Net sales were at Rs 85135 crore for quarter ended December 2011 as compared to Rs 59789 crore in the same quarter last fiscal. Gross refining margins stood at $6.80 per barrel.
The company has announced a buyback of shares worth upto Rs 10440 crore from the open market. The company intends to buy 120 million shares at a maximum price of Rs 870 per share. The company will buyback 3.6 per cent of total equity from open market.
Reliance Industries citing concerns on RoE, falling KG-D6 volumes and increased share of cyclical refining and petchem businesses. It is of the view that buyback arrangement will provide some support to the stock price in the near term.
Maruti Suzuki (5.75%), BHEL (2.94%), DLF (2.92%), Bharti Airtel (2.82%) and ITC (1.81%) were the major gainers.
Maruti Suzuki reported net profit of Rs 205.62 crore for quarter ended December 31, 2011 as compared to Rs 565.17 crore in the same period a year ago. Total income decreased to Rs 8042.77 crore for quarter ended December 31, 2011 from Rs 9624.64 crore in the same quarter last fiscal.
MSIL results came in lower than expected at the operating and net profit level. 3QFY12 was an abnormal quarter as sales were hit due to strike at the company's plant. While sales declined by 17.4% YoY, strike at the company's plant and adverse forex movement led to big drop of 63.6% in YoY net profits.
In the past few days, some positive news flow have led to appreciation of the stock price. Going ahead in FY13, volumes is expected to grow at a healthy rate, but adverse forex movement is expected to keep margins under pressure.
Market breadth was flat on the NSE with 727 gainers against 751 losers.
According to analysts, the central bank may keep interest rates unchanged while it may cut cash reserve ratio (CRR) by 25 basis points.
"We expect the Reserve Bank of India to keep the repo rate unchanged on January 24. While our earlier expectations were that the RBI would begin the repo rate cutting cycle in January, the stickiness of core inflation in the December WPI print has meant that the RBI will likely postpone the first rate cut to March in our view. This is also overwhelmingly the consensus view.
We expect the RBI to ease liquidity through a cash reserve ratio (CRR) cut of 25 bp. We put the probability of a 25-bp CRR cut at 60%, with a chance that the RBI may opt for a 50-bp cut.
The benchmarks are witnessing some resistance at higher levels after a sharp upmove since the beginning of 2012. Analysts are of the view that the market has factored in a lot of negative news last year and is now reacting positively to IIP data, inflation and earnings reports.
"Last year we got almost every bad news or wrong news on the fundamentals that you needed to sell down this market. This year, at least the beginning of the year, has been good where you had a good month of IIP numbers, inflation numbers and a lot of the earnings which have come till now have been quite okay.
One thing to note here is that at the end of calendar year 2011, markets were trading at just about 12 times one year forward numbers. 12 times does factor in a lot of negativity that we keep on talking about on a regular basis.
At some point valuations stop reacting to any kind of downside news and that is what markets have done because of which any good news is now getting well cheered up by the markets what we have seen in the last three weeks.
The National Stock Exchange's Nifty closed 5046.25, down 2.35 points or 0.05 per cent. The broader index touched a high of 5059.55 and low of 5021.35 intraday.
The Sensex ended at 16751.73, up 12.72 points or 0.08 per cent. The 30-share index touched a high of 16784 and low of 16659.32 in trade today.
Nifty is going to be range bound because there are opposing forces, which are coming down. Stocks like Reliance, Infosys and now the mid-cap guys will continue to do more catch-up.
The size of the moves will become smaller unless of course the global rally picks up further steam and 5100 gets crossed. Then you should fairly quickly run up to 5350-5400. Till then you should be here in this 5000-5100 range for a few days.
BSE Midcap Index was up 0.06 per cent and BSE Smallcap Index moved 0.27 per cent higher.
Amongst the sectoral indices, BSE Metal Index was down 2.06 per cent, BSE Oil&gas Index declined 1.66 per cent and BSE Healthcare Index slipped 0.10 per cent. BSE FMCG Index was up 0.83 per cent, BSE Realty Index gained 0.82 per cent and BSE Capital Goods Index moved 0.77 per cent higher.
Sterlite Industries (-6.01%), Hindalco Industries (-4.91%), Hero MotoCorp (-4.18%), Kotak Bank (-3.98%) Coal India (-3.19%) and Reliance Industries (-2.61%) were the major Nifty losers.
Shares of Reliance Industries were witnessing selling pressure after the company reported lower-than-expected quarterly results. Its net profit dipped to Rs 4440 crore for quarter ended December 2011 vs 5136 crore in the same quarter a year ago. The net profit is below street expectations of Rs 4500-4700 crore.
Net sales were at Rs 85135 crore for quarter ended December 2011 as compared to Rs 59789 crore in the same quarter last fiscal. Gross refining margins stood at $6.80 per barrel.
The company has announced a buyback of shares worth upto Rs 10440 crore from the open market. The company intends to buy 120 million shares at a maximum price of Rs 870 per share. The company will buyback 3.6 per cent of total equity from open market.
Reliance Industries citing concerns on RoE, falling KG-D6 volumes and increased share of cyclical refining and petchem businesses. It is of the view that buyback arrangement will provide some support to the stock price in the near term.
Maruti Suzuki (5.75%), BHEL (2.94%), DLF (2.92%), Bharti Airtel (2.82%) and ITC (1.81%) were the major gainers.
Maruti Suzuki reported net profit of Rs 205.62 crore for quarter ended December 31, 2011 as compared to Rs 565.17 crore in the same period a year ago. Total income decreased to Rs 8042.77 crore for quarter ended December 31, 2011 from Rs 9624.64 crore in the same quarter last fiscal.
MSIL results came in lower than expected at the operating and net profit level. 3QFY12 was an abnormal quarter as sales were hit due to strike at the company's plant. While sales declined by 17.4% YoY, strike at the company's plant and adverse forex movement led to big drop of 63.6% in YoY net profits.
In the past few days, some positive news flow have led to appreciation of the stock price. Going ahead in FY13, volumes is expected to grow at a healthy rate, but adverse forex movement is expected to keep margins under pressure.
Market breadth was flat on the NSE with 727 gainers against 751 losers.
Regards
RAKESH MAKIN
+91,
9041667797(DIRECT), 9915684997
OFF
0172-4657997
PANCHKULA (Haryana).
Email:makin_97@yahoo.com
Group mail id: makin97NSEtips@yahoogroups.co.in
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