Sensex falls 66 pts,Infosys Q2 hits mood

Infosys' second quarter results failed to cheer the market.

Written by Agencies | New Delhi | Published: October 12, 2012 8:55:55 am

The BSE benchmark Sensex today fell by nearly 66 points in early trade as Infosys’ second quarter results failed to cheer the market.

The 30-share index,which had gained 173.65 points yesterday,fell by 65.90 points,or 0.35 per cent,to 18,738.85 with stocks of IT,capital goods and power sectors leading the fall in first five minutes of trade.

Similarly,the wide-based National Stock Exchange index Nifty declined by 13.20 points,or 0.23 per cent,to 5,694.85.

Selling pressure sparked after below-market-expectations September quarter earnings by IT major Infosys,mainly influenced the trading sentiment,brokers said.

Funds and retail investors booking profits at prevailing higher levels also aided the fall in Sensex.

However,better trend in the Asian region restricted the loss,they added.

Shares of Infosys fell by 7.10 per cent to Rs 2,351.60 in early trade,after the company reported consolidated profit for July-September period at Rs 2,369 crore,a growth of 24.29 per cent.

In the Asian region,Hong Kong’s Hang Seng index was up by 1.07 per cent,while Japan’s Nikkei Index gained 0.71 per cent in the morning trade today.

GLOBAL MARKETS ROUNDUP

* Nifty futures on the Singapore Exchange down 0.04percent. The MSCI-Asia Pacific index excluding Japan was up 0.16 percent.

*U.S. stocks ended flat on Thursday after gains brought by a sign of improvement in the labor market were erased in part by a drop in Apple shares after a legal setback in a court ruling.

* Asian stocks and the euro steadied on Friday,but were on course for a losing week as worries about weak corporate earnings and slowing global economic growth limit the appeal of riskier assets.

FACTORS TO WATCH

* Infosys,India’s no. 2 software services provider,will report September quarter earnings. (0245 GMT)

* India will release industrial output growth data for August. (0530 GMT)

* HDFC Bank to release Sept quarter earnings. (0930GMT)

*A committee,led by prime minister’s Economic Advisory Council chief C. Rangarajan,will recommend lifting curbs on India’s tightly controlled sugar sector. (0130GMT)

* RBI to release weekly forex reserves,bank credit. (1130GMT)

INDIAN STOCKS TO WATCH NOTE: Reuters has not verified third-party stories and does not vouch for their accuracy.

TOP NEWS

* Dismissing fears of a rating downgrade,Indian Finance Minister P Chidambaram said the government will take a host of reform initiatives in the next two years to spur growth momentum.

* India’s annual exports fell for the fifth consecutive month and imports rose in September,pushing the trade deficit to its widest in 11 months in the latest bleak data from Asia’s third largest economy as it struggles to balance its finances.

* India continues to be a major recipient of funds from the International Finance Corporation. The World Bank investment arm has so far invested $3.8 billion in the country,making India IFC’s largest portfolio accounting for 9 percent of its total funding,according to the organisation’s annual report..

ENERGY/COMMODITIES

* State-run power utility NTPC Ltd’s plan to build a 500 megawatts (MW) plant in Sri Lanka appears to have been indefinitely delayed,in part because of protests by Tamil Nadu against the Sri Lankan government,according to two company executives.

* A Supreme Court appointed panel has recommended the implementation of a 300 billion rupees environment plan,funded by miners,over 30 years,in districts ravaged by mining in Karnataka.

* India’s second largest refiner,Bharat Petroleum Corp ,will complete expansion projects costing more than $3 billion at two refineries by 2015,as it moves to boost output and upgrade fuel quality,a senior company official said.

* The Indian government raised price of the most used nitrogenous fertiliser urea by 50 rupees per tonne on Thursday,a government spokesman said. Earlier,urea was priced at 5,310 rupees ($99.9) per tonne.

* Fertiliser companies would now get final subsidy reimbursement from the government on the basis of receipts produced by retailers of actual sale.

* India’s Suzlon Energy Ltd was set to default on redemption of more than $200 million in overseas convertible bonds due on Thursday after bondholders rejected a four-month extension,sending its shares down as much as 5 percent.

* Indian sugar futures fell more than 1 percent on Thursday,weighed by higher supplies as the government allowed millers to sell more sugar under the non-levy quota.

* Tata Consulting Engineers Ltd,a Tata Group company and European firm Dassault Systems,announced partnership to offer business development and engineering consultancy services to customers in various industries.

* State-run Coal India said it aims at raising production capacity to 180 million tonnes over the next five years.

* State-run hydel utility NHPC is debating the option of share buyback as part of a financial restructuring plan aimed at shoring up the company’s scrip and improve investor value.

AUTOS

* Indian tire manufacturer Apollo Tyres is in early talks to acquire a majority stake in U.S.-based Cooper Tire & Rubber Co in a deal valued at around $600 million,a source with direct knowledge of the situation said.

* India’s largest utility vehicle maker,Mahindra & Mahindrahas managed to get booking of 5,000 units of compact Sports Utility Vehicle ‘Quanto’ within three weeks of its launch.

* The Indian auto component sector grew by 15.7 percent in the fiscal 2011-12 posting a turnover of 2.10 trillion rupees but the growth will moderate to 8-10 percent in the ongoing fiscal,according to industry body ACMA.

AIRLINES/SHIPPING

* Great Offshore Ltd board approved extension of maturity date of $40 million 7.25 percent unsecured foreign currency convertible bonds due 2012 for a period of six months i.e. up to April 12,2013.

TELECOMS

* The government has granted infrastructure status to the telecom tower provider industry,a move that is likely to ensure multiple benefits to the sector as well as boost investments.

* GSM operators – Bharti Airtel,Idea Cellularand Vodafone Essar – have witnessed a decline in their number of mobile phone users in September,marking the second consecutive month their customer bases have fallen.

RETAIL

* Jubilant FoodWorks,which operates the chain of Domino’s Pizza outlets,said it plans to hike its prices by 2-3 percent next month to beat inflationary pressure.

* Unveiling its 4 billion rupees investment plans for India,Lifestyle International said new players like Ikea entering the furniture segment will only help the market grow further.

* Sony India today said it will invest 1.5 billion rupees on marketing activities during this festive season as it looks to achieve sales turnover of 28.5 billion rupees during the period.

* Austria-based Swarovski Group is close to buying a minority stake in domestic jewellery house Tara Jewels,according to two people close to the transaction. While the exact financials are not available,people quoted above said Swarovski would be picking up a 10-12 percent stake in the company,valuing it at around 5 billion rupees.

* Private equity investors Bain Capital and TPG have transferred their shares in Lilliput Kidswear to promoter Sanjeev Narula,ending a months-long public spat and helping the kidswear brand join a growing club of struggling retailers making a comeback to woo potential foreign investors.

* French retail major Auchan Group is keen to invest in India once more states start allowing FDI in multibrand retail.

* Stella McCartney and Alexander McQueen are in talks to form joint ventures in India to sell their clothing,bags and shoes through exclusive stores.

* Max Hypermarket India,a part of Dubai-based Landmark Group,is undertaking a rebranding exercise of its stores and will operate under the Auchan brand following the signing of a franchise agreement with France’s Groupe Auchan.

* Wipro founder Azim Premji has agreed to invest $25 million (about 1.3 billion rupees) in JSM Corp,which runs Hard Rock Cafe and California Pizza Kitchen restaurants in India.

INFRASTRUCTURE

* BNP Paribas and Srei Infrastructure have invested about 2 billion rupees of equity in their joint venture company – Srei Equipment Finance (Private) Limited. This will take the net worth of the Company to over 16.6 billion rupees.

HEALTHCARE

* The government on Thursday told the Supreme Court that it would firm up a drug policy by November 27,2012,and then revise its essential drugs list under the Drug Price Control order to include 348 drugs. The existing essential drugs list has only 74 drugs.

REALTY

* Motilal Oswal Private Equity,an India-focused risk capital firm,is raising a 5-billion rupees real estate fund that will invest primarily in residential projects.

MEDIA

* Standard Chartered Private Equity,the investment arm of the global bank,has invested $35 million (1.85 billion rupees) in visual entertainment services group,Prime Focus Ltd,at a maximum price of 53 rupees per share,the company announced on Thursday.

INSURANCE

* German insurance company HDI-Gerling International Holding AG has paid four times premium on 260 million rupees for its 26 percent stake in Magma HDI General Insurance Co with a commitment of raising the holding to 49 percent when the government allows it.

OTHER FACTORS TO WATCH

* Indian debt/FX factors to watch

* Euro steadies,yen eases vs dollar

* Oil rises as Turkey-Syria tensions fuel supply concerns

* Foreign institutional investor flows

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