Wednesday March 28, 03:30 PM
IT compounds the misery... |
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By Equitymaster.com
In sync with the day's proceedings, markets lost further ground during the final hour of trade. With constant selling pressure engulfing them, only 13 of the Nifty stocks managed to close above the break even. Selling pressure was not just restricted to frontline stocks as the decline outnumbered advances in the ratio of 3:1 on the overall NSE. Barring select media, power and cement stocks, selling pressure was witnessed across the board. Selling pressure was particularly severe amongst IT stocks on the back of rupees advances against the dollar over the last few days.
The BSE Sensex closed at 12,869 (255 points) while the NSE Nifty closed at 3,761 (59 points). The rupee was trading at 43.11 to the dollar.
After yesterday's holiday, markets opened on a weaker note and continued to remained range bound during the subsequent trading hours. However, selling by the participants in the final hour of the trade dragged the benchmark indices further lower. The weakness could be attributed to negative global cues with none of the major Asian markets closing in the green. European markets have also opened weak. Higher oil prices also seem to be playing spoilsport.
Aventis has announced mixed results for the fourth quarter and year ended December 2006. While the 14% YoY increase in revenues from the domestic market has largely driven the topline growth (up 9% YoY), revival in exports (up 25% YoY) especially in the fourth quarter has cushioned any further fall in exports for the full year. Operating margins have contracted by 270 basis points owing to a rise in raw material costs and other expenditure, the impact of which was more pronounced in the fourth quarter. Higher other income and a lower tax outgo have led to the bottomline growing at a faster pace than the topline for the full year. The stock closed weak down (2%). Other Pharma stocks witnessed a mixed trading session with Pfizer (PFIZ.BO, news) and Dr. Reddy (REDY.BO, news) 's (up 2%)and Ranbaxy (up 3%) lead the pack of gainers. Cipla (down 1%) and Sun Pharma (SUN.BO, news) (down 2% each) ended weak.
IOC is planning a major expansion in Turkey which includes setting up a US$ 6 bn greenfield refinery, acquiring a majority stake in an existing petrochemical company and entering into fuel retailing. The overseas plan is part of the company's five-year expansion strategy with an investment of around Rs 430 bn. IOC will hold 51% equity stake in the 15 million tonne refinery project and may rope in Calik Energy as a partner for the same. The refinery is expected to be built by 2012 and it would export products to the US and European markets. IOC also plans to market its products in the domestic market through its proposed retail outlets. In order to consolidate itself in the downstream segment, IOC is planning to acquire government-run chemicals company Petkim Petrokimya Holdings and is looking for investment opportunities in Africa, Central Asia and the Middle East. The stock closed weak (3% lower), along with its peers HPCL (down 4%) and BPCL (down 3%).
According to a leading business daily, Maruti is planning to increase its share in the bigger car segments. Towards this, the company is gearing to launch two new models - mid-size SX4 and Grand Vitara in the next two to three months. Currently, Maruti has two dated models in this segment - Esteem and Baleno. The launch of the new models is expected to strengthen Maruti's position and take advantage of the high growth potential in the premium car segment. In the domestic market, Maruti's new models will be pitted against Honda City, Hyundai Verna, Ford Fiesta, Chevrolet Aveo and others. Automobile stocks ended weak with Ashok Leyland (ASOK.BO, news) (5%), Tata Motors (1%) and Maruti (2%) featuring among the major losers.
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