Wednesday May 22, 03:30 PM
Watchful trend... |
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By Equitymaster.com
Markets went through a roller coaster ride today. Though attractive valuations seem to have resulted in buying interest in few sectors, nervousness still prevails. Markets are waiting for clarity to emerge on the border issue. Like yesterday, markets recovered towards the end of the day.
The BSE Sensex closed at 3,175 (down 12 points) and the NSE Nifty closed at 1,045 (down 4 points). The rupee was trading at Rs 48.98 per US dollar.
Auto stocks had a mixed day today. While two-wheeler majors like Hero Honda (HROH.BO, news) fared well, Telco and M&M lost heavily. Sluggish demand for tractor has increased working capital requirements of tractor manufacturers and M&M's receivables period are likely to increase. Telco's CV demand could be affected on account of war. Escorts (ESCO.BO, news) and Punjab Tractors were also weak.
Cement stocks like ACC also gained support (5%). Given the fact that cement demand is expected to rise by 6%-8% in the coming fiscal combined with its improving operating efficiency, bottom fishing seems to be on. This could have been also led by reports of a sharp 26% rise in cement demand in the Northern region. Gujarat Cements and India Cements also inched higher. Gujarat Ambuja has announced an interim dividend of 40%, encouraged by the good performance.
ICI India (ICI.BO, news) gained 12%. The company has reported a net profit of around Rs 808 m for FY02 as compared to Rs 689 m in FY02. However, a key portion of this was on account of profit on sale of some of divisions. Nevertheless, the company is expected to improve on its operating margins in the next two years.
Nalco was up 8%. The stock is in the list of disinvestment and a number of private and PSUs are expected to bid. Trigyn, ICICI Bank (ICBK.BO, news) , Digital, Thermax (THMX.BO, news) , Telco, HCL (HCLL.BO, news) Tech, Trent (TREN.BO, news) , Ranbaxy, Thomas Cook (THOM.BO, news) , Tisco, TVS Motor, ICICI (ICIC.BO, news) , Gujarat Gas and MTNL (MTNL.BO, news) were up. Engineers India closed up 10%.
Corporation Bank has reported a 9% increase in fourth quarter earnings. The bank's total income for the same period has grown by a marginal 4%. While interest income was up 8%, operating profits was flat for FY02. But due to a spurt in other income, for the full year ended FY02, the bank reported 18% growth in profits. It has maintained dividend of 40%. The stock was down marginally.
Sensitivity analysis
While sentiment continues to remain cautious, the support on the bourses came from buying in Hero Honda and Infosys. Together they added 8 points to the Sensex. ITC (ITCd.BO, news) , Dr. Reddy (REDY.BO, news) 's and Nestle also gave Sensex some support. Due to proximity to the border, Reliance (RELI.BO, news) succumbed to selling even today. The stock pulled down Sensex by 5 points. Since selling in HCL Tech, Ranbaxy, Telco and Reliance Petro persisted, markets stayed in the red.
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