Fresh MSCI stocks outperform in weak market
The stocks which are supposed to be included in the Morgan Stanley Capital (MSCI) Emerging Markets index effective from close of 31 May 2006 largely outperfomed the weak key indices today.
The BSE Sensex is turning out to be a package of surprises for after having tanked as many as 675 points, to 10.911.96 during afternoon trade, it managed to end lower by only 388.02 points (3.60%), on 10,398.61.Broad-based selling across the board was witnessed. The BSE mid-cap index slumped 2.74% while the BSE small-cap index plunged 4.06%.On cue from a global meltdown in equities, the benchmark index opened with a negative bias, at 10,679.49, which was also the day's highest. It oscillated 675 points amid high volatility.The S&P CNX Nifty lost 111 points (3.48%), to 3,074.45
A sharp recovery in the index heavyweight Reliance Industries (RIL) and ONGC from the lows, helped the market to gain some respectability.Local bourses witnessed a sell off as a plethora of negative factors dampened sentiment. The impact of weak global markets persisted beyond opening trade and the BSE Sensex slumped sharply under acute selling pressure.A host of other factors such as lower base metal prices and drooping auto, banking and cement shares for the second successive day ripped apart the domestic bourses in early trade. However, there was some damage control witnessed later during the day.
The Nikkei 225 index slipped 2.47% on Wednesday, after earlier dropping to a three-month low, as shares of Sony Corp., and other exporters lost ground on concerns about a potential slowdown in the key US market.The Nikkei finished 392.12 points lower, at 15,467.33, its lowest level since February.
US stocks tumbled overnight on Tuesday as higher crude oil prices and a disappointing sales report from Wal-Mart Stores Inc., stirred worries about a potential slowdown in consumer spending. The Dow Jones industrial average slid 184.18 points, or 1.63%, to end at 11,094.43. The Standard & Poor's 500 Index dropped 20.32 points, or 1.59%, to finish at 1,259.84. The Nasdaq Composite Index fell 45.63 points, or 2.06%, to close at 2,164.74.
Worries about the strength of consumer spending at home dented shares of Japanese retailers, with Fast Retailing Co Ltd., dropping more than 2%.The consistently soaring prices have also become a concern in the past few months. Crude oil prices edged higher on increasing demand from China, with the Nymex light crude oil for July delivery moving up 66 cents, to $ 72.03 a barrel.The Indian rupee has plunged to its lowest level since June 2003. The rupee is now quoting at 46.55 to a dollar.
The market breadth on BSE recovered a bit in last session of trade, which still ended negative, with advances to decline ratio pegged at 1:4. Only 413 shares progressed compared to 2,005 that receded. A meagre 41 shares remained unchanged.The total turnover on BSE amounted to Rs 3,521 crore, which has picked up since that of Tuesday’s Rs 3,215 crore.Among the Sensex constituents, 27 slid while 3 managed to head higher. For most of the day, all components were in the red.
FMCG major, ITC lost 6.62%, to Rs 164.95 on 49.01 lakh shares.Tata Steel slumped 6.07%, to Rs 514.25 on 34.42 lakh shares.
Oil exploration major ONGC plunged 6% to Rs 1,109 on reports that it is likely to share a large subsidy burden of oil marketing companies. The government mulls raising the subsidy by a staggering 71% this fiscal, to Rs 24,000 crore as part of its bailout package for oil marketing companies. As many as 7.55 lakh shares changed hands in the counter. It recovered from a low of Rs 1,052.05.
Grasim lost 5.10% to Rs 1,781 while L&T slipped 5.73% to Rs 2,310.Bike makers, Hero Honda Motors (down 4.2% to Rs 754) and Bajaj Auto (down 2.65% to Rs 2754), were dented on concerns about pressure on margins and higher fuel prices. The Indian government is expected to review retail fuel prices and taxes on oil products by Friday.
Among the gainers, Reliance Industries (RIL) witnessed a smart pull-back from the day’s low of Rs 918.60. It finished 0.5% up, at Rs 960 on 32.44 lakh shares.HDFC Bank rose 0.49% to Rs 754 on 66,998 shares.Dr Reddy’s added 0.23% to Rs 1,374, after it recommended a liberal 1:1 bonus issue. It had hit a low of Rs 1,282.10.Reliance Industries (RIL) was the top-traded counter on BSE with a turnover of Rs 303.70 crore, followed by Tata Steel with Rs 176.25 crore.
NTPC clocked a turnover of Rs 101.26 crore, after a staggering block deal of 80 lakh shares was struck in the counter at Rs 112.50 by 12:24 hours. It closed 1.92% to Rs 112.50, on cumulative volume of 90.08 lakh shares.
The MSCI India Index has added five stocks, while deleting one. Stocks as a part of the India index now go up to 68. All the additions made by the index surged in the second half of the day.After this recast, India weightage in MSCI EM Asia goes up from 11.93% to 12.09%.
Bajaj Hindustan, which slumped to a low of Rs 355.50 during the day, closed with a surge of 12%, to Rs 454.80 on 3.74 lakh shares.Indiabulls Financials surged 7.42% to Rs 302 after slipping to a low of Rs 263. A massive 13.32 lakh shares changed hands on the counter.Jaiprakash Associates (up 1.60% to Rs 450, after hitting a low of Rs 410), Reliance Capital (up 3.60% to Rs 512.60 after hitting a low of Rs 462.30) and Siemens India (up 0.15% to Rs 4948, after hitting a low of Rs 4624.90) all surged from the lows of the day.
Castrol India, which was discarded from the index, slumped 3.40% to Rs 181.90 on 1.12 lakh shares.
The BSE metal index slumped 4.31% tracking global commodity prices. After opening on a mixed note, metals have tumbled across the board on the London Mercantile Exchange (LME). While Aluminium dropped $ 101 to $ 2,698, Copper plunged $ 280, to $ 7895. Nickel has plummeted $ 1,400, to $ 21,100, and Zinc is down $ 101 to $ 2,698. Shares of Nalco (down 6.51% to Rs 225.05), Hindalco (down 3.90% to Rs 187.10), Hindustan Zinc (down 1.15% to Rs 729.90) and SAIL (down 5.90% to Rs 78.90) were the major losers.
Bombay Dyeing plunged 10.17% to Rs 665.10 after it posted a net loss of Rs 7.40 crore for the quarter ended 31 March as compared to a net loss of Rs 3.44 crore for the same quarter in 2004-05. Total income for the fourth quarter in 2005-06 dipped 24.73% to Rs 218.85 crore from Rs 290.73 crore in the year-ago period.
Uttam Galva Steel plunged 6.82% to Rs 35.50 after it reported 16% fall in fourth-quarter net profit to Rs 31.10 crore (Rs 26.05 crore). Net sales slipped to Rs 427.35 crore (Rs 537.90 crore). For FY 06, net profit declined to Rs 74.33 crore (Rs 94.67 crore). Net sales amounted to Rs 1,788.20 crore (Rs 2,091.71 crore).
Tata Chemicals slipped 3.1% to Rs 228 after it posted 42.03% decline in net profit for the quarter ended 31 March 2006, to Rs 64.42 crore from the previous corresponding Rs 111.13 crore. Quarterly net sales rose 4.66% to Rs 753.09 crore (Rs 719.56 crore).
Ipca Laboratories jumped 7.60% to Rs 310 on the back of improved Q4 March 2006 results. Ipca’s profit-after-tax before extra-ordinary items rose 14.4%, to Rs 17.96 crore. Sales rose 13.7% to Rs 180 crore. The results were better on a sequential basis, mainly the company had reported disastrous performance in Q3 December 2005 mainly due to pricing pressure in European markets. The company’s net profit in Q3 December 2005 was a meager Rs 2.67 crore.
Emerging markets have seen a sell-off by foreign funds this month on concerns about high valuations, rising interest rates in Japan and the United States and volatile commodity prices. Indian investors are also worried about rising foreign fund sales, which totaled $ 2.47 billion over 13 sessions to Monday, trimming net investment in Indian stocks this year to $ 2.38 billion.
On 29 May 2006, FIIs were net sellers of stocks to the tune of Rs 81.80 crore. They have been on a selling drive as they remained net sellers for the eleventh consecutive session.