Wednesday April 18, 03:30 PM
Bulls end with a whimper... |
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By Equitymaster.com
Amidst profit booking by the participants, markets lost some of their gains during the final hour of trade. However, benchmark indices have managed to close above the break-even. Advances outnumbered declines in today's market session as only 18 of the Nifty stocks ended below yesterday's close. Select auto, energy, engineering and power stocks bore the brunt of selling pressure, while buying interest was seen in FMCG, pharma, banking and telecom stocks.
The BSE Sensex closed at 13,672 (up 65 points) while the NSE Nifty closed at 4,011 (up 26 points). The rupee was trading at 41.97 to the dollar.
Today's trading session started on a firm note with benchmark indices opening well above yesterday's close. Thereafter, it gained ground during the initial hours of trade. However in the afternoon session, markets consolidated their gains with their movement being restricted to a narrow range. Just as it was being felt that the indices would once again end significantly higher, selling pressure during the final hours of trade dragged the indices from the day's high. The advance to decline ratio on the overall NSE continued to be in the favour of advances in the ratio of 1.2:1. Asian markets ended the day's proceedings on a firm note while European markets have opened weak.
UTI Bank (UTBK.BO, news) announced results for the fourth quarter and full year ended March 2007 yesterday evening. The topline has grown by 58% YoY for the year led by strong growth in advances and fee income. Despite a sizeable advance book, UTI Bank showed no signs of slowing down in its incremental advance growth, clocking over 50% YoY growth for the seventh consecutive quarter in 4QFY07. The delinquency figures suggest that the bank has taken the step at re-working its retail strategy given the high-risk weightage of incremental retail assets. Both retail and corporate segments contributed an appreciable proportion of the fee income growth. While the bottomline for both the periods under review grew in excess of 35% YoY, offering no disappointment on the fee income and asset growth front, operating costs and treasury losses have proved to be dampeners. However, the 200 basis points fall in net profit margins point towards inability to sustain high profits along with growth. The stock, along with its peers ICICI Bank (ICBK.BO, news) and HDFC Bank (HDBK.BO, news) , ended 1% higher.
Private sector petroleum giant, Reliance (RELI.BO, news) Industries, has drawn up investment plans of up to Rs 80 bn in the proposed 1,100-km gas pipeline from Kakinada in Andhra Pradesh to Howrah in West Bengal. The pipeline will connect West Bengal to RIL's discoveries in the Krishna-Godavari and Mahanadi-NEC basins. Additional investments ranging up to Rs 50 bn may be made in setting up city gas distribution infrastructure in Kolkata, Howrah, Hoogly, Midnapore and Burdwan. RIL has already invited expressions of interest for common access of the pipeline. The offer will close this month, following which the company will finalise the pipeline`s capacity. This is consistent with the new pipeline policy, which invariably calls for creation for 33% spare capacity by the company laying down pipelines. The company plans to produce 80 million metric standard cubic metres per day of gas from the KG basin and is working out development plans for discoveries in the Mahanadi-NEC block. The company's move to foray into City gas distribution, a high margin business is likely to push up the blended realisation on sales of gas. The stock of Reliance Industries (up 1%) along its peer ONGC (up 2%) ended firm.
TCS will be increasing its workforce by 50% in FY08, a considerable 40% jump over the number it hired in FY07. This is despite the fact that the company has the lowest attrition rate of 11.3% in the IT sector. The US$ 4.3 bn company currently has 89,419 consultants in 47 countries. Last year, the company hired 32,462 employees on a gross basis and the company's wage bill escalated 64% from Rs 47.2 bn in FY06 to Rs 77.4 bn in FY07. The company has already made over 12,000 campus offers to trainees joining in FY08. TCS will give a 3% to 5% hike in salaries to onsite consultants and a 12% to 15% hike to offshore employees. The massive hiring is in line with the company's strategy of consistently setting up global delivery centres across the world and to make continuous efforts to build a global pool of professionals. The stock of TCS along with its peer Infosys ended flat, while its peers Satyam (up 1%) and Wipro (up 2%)ended firm.
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