Sensex slides in choppy trade after S&P warning
[Editor: Yesterday, Nifty_Dec_6300 Call was given at the late hours at Rs.176 with a target price of Rs.192, today it reached the target and touched Rs.218. But I would still suggest not to invest too much money in F&O market. A case in point is that: though my F&O calls are more than 95% accurate since the last 7-8 months but I myself GENERALLY do not play in the F&O Market (except in some rare occasions). Even for my clients I generally do not suggest a F&O buy, because of the obvious reasons Buy some good scrips (the scrips which has a story to tell or which are in trend, like the Banks and now when the rupee is depreciating the IT) and keep holding with occasional buying and selling. Don't wait for too much profit as this market is very treacherous--go on booking profits as it comes on the way or depending upon your risk taking ability. Also, always have some back-up money, if you are leveraged, to support the scrip in case market tanks suddenly. Never take more than double the scrip value as LEVERAGE in these market condition (or in perhaps in any market condition). Moreover, if you have confidence that a scrip would rise from the lows then then there is no need to apply Stop Loss or else in case of confusion do exit at the Stop Loss. Today, I gave a buy in Punj Lloyd Ltd at Rs.27.70-28.20, T--Rs.35, SL--Rs.26. In September, 2013 quarter results (consolidated) the company actually came out with a small net profit of Rs.1.58 Cr against a loss of Rs.3.78 Cr in Q2FY1, before minority interest. Its order book, though, currently stands at a healthy Rs 20,891 crore.
Anyway, at the end I would like to mention that: remember, when even for the EXPERTS it is becoming difficult to mint money from these market conditions, please do not try to play on your own, unless you have sufficient experience / knowledge in this space. You can Join my recommended brokerage house and get assistance during the market hours. This is a BUY on DIPS kind of market and hence every fall is an opportunity to buy. Even today, FIIs have bought shares around Rs.479.24 Cr today, though DIIs have been continuously selling (Rs.715.07 Cr today). The Indian Market Canvas is slowly emerging as a classic 2004-05 template of FIIs' investment pattern. Have patience, any market generally rewards investors over a period]
Indian stocks fell for the third day in a row today, 7 November 2013. The Sensex has fallen 416.59 points or 1.96% in three trading sessions from a record closing high of 21,239.36 which it had attained during the special Diwali Muhurat trading session held on Sunday, 3 November 2013. The index has fallen 341.75 points or 1.61% in November so far (till 7 November 2013). The Sensex has garnered 1,396.06 points or 7.19% in calendar 2013 so far (till 7 November 2013). From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 3,374.06 points or 19.34%. From a record high of 21,321.53 on 3 November 2013, the Sensex has fallen 498.76 points or 2.34%.
Coming back to today's trade, IT stocks extended Wednesday's gains as the rupee edged lower against the dollar. Infosys hit 52-week high. Bharat Heavy Electricals (Bhel) extended Wednesday's losses triggered by the company's weak Q2 results. Index heavyweight Reliance Industries (RIL) declined in choppy trade. Most bank stocks edged lower in choppy trade.
A bout of initial volatility was witnessed as key benchmark alternately swung between positive and negative terrain. Volatility continued in morning trade. Key benchmark indices moved in a narrow range in mid-morning trade. A sudden surge took the key benchmark indices to fresh intraday high in early afternoon trade. The Sensex regained the psychological 21,000 mark. Key benchmark indices pared gains in afternoon trade. High volatility was witnessed as key benchmark cut almost entire intraday gains in mid-afternoon trade. The Sensex slipped into the red and hit fresh intraday low in late trade.
Global credit rating agency Standard and Poor's (S&P) today, 7 November 2013, affirmed its 'BBB-/A-3' sovereign credit rating on India while retaining negative rating outlook on Asia's third-largest economy. S&P said in its statement that India's institutional strengths and high international reserves supported its investment-grade rating on India. However, the agency noted a marked slowdown in India's real growth, which complicates the government's debt dynamics and ability to implement reforms. S&P added that the outlook remained negative, indicating that it may lower the rating to speculative grade next year if the government that takes office after the general election does not appear capable of reversing India's low economic growth. Alternatively, the credit ratings agency said it may revise India's outlook back to stable should a new government have an agenda to restore growth, improve the country's finances, or allow the implementation of an effective monetary policy. S&P added it will conduct its next review on India's ratings after the elections, which are due by May 2014, unless the country's fiscal or external standing deteriorates.
The S&P BSE Sensex fell 72.17 points or 0.35% to settle at 20,822.77, its lowest closing level since 28 October 2013. The index fell 97.88 points at the day's low of 20,797.06 in late trade. The index jumped 247.91 points at the day's high of 21,142.85 in early afternoon trade, its highest level since 5 November 2013.
The CNX Nifty fell 27.90 points or 0.45% to settle at 6,187.25, its lowest closing level since 28 October 2013. The index hit a low of 6,180.80 in intraday trade. The index hit a high of 6,288.95 in intraday trade, its highest level since 5 November 2013.
The BSE Mid-Cap index fell 1.07% and the BSE Small-Cap index fell 1.14%. Both these indices underperformed the Sensex.
The market breadth, indicating the overall health of the market, was negative. On BSE, 1,402 shares fell and 1,080 shares rose. A total of 149 shares were unchanged.
The total turnover on BSE amounted to Rs 2077 crore, higher than Rs 1882.43 crore on Wednesday, 6 November 2013.
The S&P BSE Realty index (down 2.62%), the S&P BSE Consumer Durables index (down 2.26%), the S&P BSE Bankex (down 2.11%), the S&P BSE Power index (down 1.97%), the S&P BSE PSU index (down 1.46%), the S&P BSE Capital Goods index (down 1.4%), the S&P BSE Oil & Gas index (down 1.17%) and the S&P BSE Auto index (down 1.01%), underperformed the Sensex.
The S&P BSE FMCG index (down 0.22%), the S&P BSE Healthcare index (down 0.01%), the S&P BSE Teck index (up 0.61%), the S&P BSE Metal index (up 0.64%) and the S&P BSE IT index (up 1.25%), outperformed the Sensex.
Among the 30-share Sensex pack, 17 stocks fell, 12 stocks rose and 1 stock was unchanged.
Index heavyweight Reliance Industries (RIL) fell 1.42% to Rs 885.95. The stock hit high of Rs 904.95 and low of Rs 882.50.
Bank stocks edged lower. ICICI Bank declined 2.70% to Rs 1,051.10. The stock hit high of Rs 1,091.70 and low of Rs 1,048.30.
HDFC Bank declined 0.4% to Rs 665.35. The stock hit high of Rs 677.10 and low of Rs 661.55.
Among PSU bank stocks, Bank of Baroda (down 5.91%), United Bank of India (down 5.6%), Dena Bank (down 5.38%), Central Bank (down 4.99%), Andhra Bank (down 4.28%), Bank of India (down 4.25%), Canara Bank (down 4.24%), Punjab & Sind Bank (down 4.04%), Oriental Bank (down 3.92%), State Bank of Mysore (down 3.77%), UCO Bank (down 3.53%), Indian Bank (down 3.26%), State Bank of India (down 3.17%), Vijaya Bank (down 3.11%), Corporation Bank (down 2.93%), Bank of Maharashtra down 2.82%), Punjab National Bank (down 2.66%), Union Bank of India (down 2.49%), Syndicate Bank (down 2.49%), IDBI Bank (down 2.33%), State Bank of Bikaner (down 2.29%), Allahabad Bank (down 2.16%) and Jammu & Kashmir Bank (down 0.55%), edged lower.
Bharat Heavy Electricals (Bhel) extended Wednesday's losses triggered by the company's weak Q2 results. The stock shed 4.27%. The company's net profit fell 64.22% to Rs 455.95 crore on 11.31% decline in total income to Rs 9482.25 crore in Q2 September 2013 over Q2 September 2012. The Q2 result was announced during trading hours on Wednesday, 6 November 2013.
Bhel's order book stood at Rs 102300 crore as on 30 September 2013.
L&T edged lower in choppy trade. The stock shed 0.68% to Rs 956. The scrip hit high of Rs 984.40 and low of Rs 954.15. L&T today, 7 November 2013, said its construction division won new orders worth Rs 2309 crore across various business segments in October and November 2013. The announcement was made during trading hours.
IT stocks extended Wednesday's gains as the rupee edged lower against the dollar. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports. TCS (up 1.41%) and HCL Technologies (up 1.68%), edged higher. But, Wipro was unchanged at Rs 481.50.
Infosys rose 1.61% to Rs 3,359.15 after hitting 52-week high of Rs 3,399.20 in intraday trade.
US based IT services firm Cognizant Technology Solutions Corp, which has most of its employees in India, raised its full-year forecast for both profit and revenue at the time of announcing its Q3 September 2013 results early this week. Cognizant reported a better-than-expected 22% rise in revenue in third quarter, helped by contracts from insurers setting up online exchanges as part of President Barack Obama's healthcare reforms. The company, which also raised its full-year forecast for both profit and revenue, said it would focus on winning more business from governments. The company's net income rose to $319.6 million, or $1.05 per share in the third quarter, from $276.9 million, or 91 cents per share, a year earlier. The company said it expects earnings of at least $4.01 per share on revenue growth of at least 20.3% to $8.84 billion for the year ending 31 December 2013. It had previously forecast earnings of at least $3.96 per share on revenue growth of at least 19% to $8.74 billion for 2013.
Steel stocks rose after the world's biggest steelmaker ArcelorMittal said at the time of announcing its Q3 result said that the company is cautiously optimistic about the prospects for 2014. Tata Steel (up 3.64%), Sail (up 2.27%), Bhushan Steel (up 1.5%), Hindalco Industries (up 1.04%) and JSW Steel (up 0.71%), edged higher. Jindal Steel & Power was down 0.90%.
NMDC rose fell 1.88%. The stock turned ex-dividend today, 7 November 2013, for the interim dividend of Rs 3 per share for the year ended 31 March 2014 (FY 2014).
ArcelorMittal, the world's biggest steelmaker, today, 7 November 2013, reported a 19% increase in third-quarter profit and maintained its full-year earnings forecast. Earnings before interest, taxes, depreciation and amortization rose to $1.71 billion from $1.45 billion a year earlier, Luxembourg-based ArcelorMittal said in a statement. The bottom of the cycle is behind us. Although operating conditions remain challenging, as economic indicators are improving we are cautiously optimistic about the prospects for 2014, Chief Executive Officer Lakshmi Mittal said in the statement.
Titan Industries lost 2.79% after the Reserve Bank of India put restrictions on fresh foreign portfolio investment in the company's shares. The Reserve Bank of India (RBI) after market hours on Wednesday, 6 November 2013, notified that the aggregate net purchases of equity shares in Titan Industries by foreign institutional investors (FIIs) in the primary/secondary markets under Portfolio Investment Scheme (PIS) had reached the trigger limit. Hence, further purchases of equity shares of the company would be allowed only after obtaining prior approval of the RBI.
FIIs, at the end of September 2013, controlled 22.43% stake in Titan Industries, while promoters holding stood at 53.05%.
Wockhardt surged 6.33% after the UK health regulator allowed its Kadaiya, Nani Daman facility to manufacture and supply most of the products approved to be produced at the unit. The announcement was made after market hours on Wednesday, 6 November 2013.
Wockhardt said that UK's Medicine and Healthcare Products Regulatory Agency (UKMHRA) has allowed the company to manufacture and supply most of the products manufactured at the company's facility at Kadaiya in Nani Daman and assessed to be critical to public health. As a result the net impact on the annualised consolidated revenue is expected to be less than 1 million pounds, out of the total annual consolidated revenue of approximately 18 million pounds from the said facility, Wockhardt added.
Last month, UKMHRA had imposed restrictions on import of medicines made at Wockhardt's Kadaiya unit for violation of norms.
Sobha Developers rose 1.29% on good Q2 result. The company's consolidated net profit rose 13% to Rs 56.60 crore on 31% increase in revenue to Rs 545 crore in Q2 September 2013 over Q2 September 2012. The result was announced after market hours on Wednesday, 6 November 2013.
Bajaj Electricals gained 1.90% after the company's engineering and project business unit bagged power distribution projects worth Rs 757 crore under Rajiv Gandhi Gramin Vidyutikaran Yojna scheme. The company announced the orders win after market hours on Wednesday, 6 November 2013.
Triveni Turbine tumbled 6.93% on weak Q2 result. The company's net profit fell 45.55% to Rs 15.30 crore on 31.6% decline in net sales to Rs 122.90 crore in Q2 September 2013 over Q2 September 2012. The Q2 result was announced after market hours on Wednesday, 6 November 2013.
Triveni Turbine's EBITDA (earnings before interest, taxation, depreciation and amortization) declined 42.95% to Rs 25.90 crore in Q2 September 2013 over Q2 September 2012. EBITDA margin declined to 21.1% from 25.3% a year ago.
State Bank of India closed a highest turnover of Rs 96.37 crore on BSE. Tata Steel (Rs 74.54 crore), Tech Mahindra (Rs 62.83 crore), Wockhardt (Rs 51.42 crore) and ICICI Bank (Rs 45.79 crore), were the other turnover toppers on BSE in that order.
Unitech reported highest volumes of 50.46 lakh equity shares on BSE. Cals Refineries (48.94 lakh shares), SpiceJet (48.43 lakh shares), Jaiprakash Associates (30.93 lakh shares) and Empower India (30.39 lakh shares), were the other volume toppers on BSE in that order.
In the foreign exchange market, the rupee edged lower against the dollar in choppy trade after global credit rating agency Standard and Poor's (S&P) warned that it may lower India's rating to speculative grade from investment grade next year if the government that takes office after the general election does not appear capable of reversing India's low economic growth. The partially convertible rupee was hovering at 62.42, compared with its close of 62.39/40 on Wednesday, 6 November 2013. The rupee had declined sharply on Wednesday.
Most European stocks edged lower on Thursday, 7 November 2013, as investors awaited the European Central Bank's interest rate decision. Key benchmark indices in France and UK shed 0.16% to 0.24%. Germany's DAX rose 0.04%.
The European Central Bank (ECB) holds a monetary policy meeting today, 7 November 2013. The ECB is seen retaining its key policy rate at a record-low 0.5%. The Bank of England is expected to keep monetary policy unchanged after a monetary policy review today, 7 November 2013.
Asian stocks fell on Thursday, 7 November 2013, before US economic reports and the European Central Bank's policy meeting. Key benchmark indices in Singapore, China, Japan, Hong Kong and South Korea shed 0.1% to 0.76%. Key benchmark indices in Taiwan and Indonesia and rose 0.02% to 0.82%.
China's leaders will meet in Beijing on November 9-12 to map out economic policies as the country heads for its slowest annual growth in more than two decades.
Trading in US index futures indicated that the Dow could fall 14 points at the opening bell on Thursday, 7 November 2013. Most US stocks rose on Wednesday, 6 November 2013, with the Dow Jones Industrial Average notching another record close, as investors bought into optimism that the Federal Reserve would continue its stimulus longer than thought, ahead of economic reports this week on the economy and the labor market.
Data on US GDP growth for Q3 September 2013 is due for release today, 7 November 2013. The GDP grew 2.5% in Q2 June 2013.
The US government will tomorrow, 8 November 2013, release nonfarm payrolls figures for October 2013. The job data is a key economic indicator that has been watched closely in recent months to see whether the US Federal Reserve will roll back its bond-buying program.
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