Indian Market Rebounds in Intra-day

Elena
28 Apr, 2006
New York City

The Indian market recovered in the last half hour of trading, immediately after the news that SEBI had suspended its interim order barring Indiabulls Securities from trading. That happened amidst high volatility, with the Sensex moving up and down during the session. Positive results from Reliance also helped boost the market.

[R]10:30AM Sensex rebounds after a volatile session.[/R]
Sensex in India finished after moving up 16.91 points (14%), to 11,851.93. The daily turnover on BSE was Rs 4426 crore, lower than yesterday’s Rs 5335 crore.Reliance Industries advanced 1.2% to Rs 1,009.That impacted the market as the company’s weightage is 10.4% in the index. TCS also posted positive news, increasing 1.9% to Rs 1.990. Another company to toe the line was ICICI Bank, gaining 1.4% to Rs 575. Infosys broke the line, remaining flat at Rs3.135. The company stock rebounded from the prior level of Rs 3.095.

Auto stocks also looked positive. Hero Honda advanced 3.2% to Rs 850 and Maruti Udyog put up 2.8% to Rs 924. US crude for June delivery declined 32% to settle at $70.65. ACC advanced 1.8% to Rs 951. Cement prices have been on the rise over the past few days. NTPC, power generation company advanced 4.6% to Rs. 135.50.

Patni Computer reported first quarter flat earnings of $13 million on revenue of more than $145 million. The revenue jumped 33% but earnings declined 5%. The ADR of the company stock in New York trading has declined from $24 to $16 in less than three months. Hindustan Lever reported fourth quarter profit of $100 million (Rs. 442 crores) vs. $55 million (Rs. 250 crores).


[R] 9:45AM Stocks opened in the negative. The Nasdaq dropped 1%.[/R]
U.S. stocks opened in the negative with the major equity indices moving to the downside. The Nasdaq showed a considerable weakness at the start of the trading session, dragged down by Microsoft ((MSFT)). The tech-heavy average dropped 1% after the software giant reported disappointing earnings and outlook. The stock slipped 11%.

The disappointing results from Microsoft contributed to weakness throughout the technology sector, sending software and computer hardware stocks notably lower. At the same time, strength among health insurance and commodity stocks helped to limit the downside for the broader markets. UnitedHealth Group Inc. ((UNH)) gained 1% following a government report that the health insurer landed the biggest share of participants in the new privately administered Medicare drug program. Another increase in the price of oil sent the energy sector higher, with oil service stocks posting significant strength after moving sharply lower in the previous session. Gold and other metal stocks rebounded as the increase in metal prices generated some buying interest.

Airline socks reversed from recent gains to post considerable weakness in early trading, sending the Amex Airline Index down by 1.6%. The weakness in the airline sector was attributable to an increase in the price of oil, which raised concerns about higher fuel costs. In the first hour of trading, the Dow Jones industrial average fell 20.49, or 0.18%. The Standard & Poor''s 500 index was down 0.69, or 0.05%, and the Nasdaq composite index slid 20.20, or 0.86. Bonds edged higher on the GDP data, with the yield on the 10-year Treasury note falling to 5.09% from 5.11% late Thursday.


[R]9:00 AM Stock futures indicated a negative market opening.[/R]
U.S. stock futures pointed to a weak start, following a sharp market turnaround on Thursday when stocks moved sharply higher after Ben Bernanke’s testimony before Congress. Stocks turned to positive direction as rate concerns receded after the Fed Reserve Chairman raised hope that the Fed may pause its interest rate raising campaign. Economic outlook and interest rates are expected to remain in focus today after a report on first quarter GDP was released, showing GDP growth roughly in line with analyst estimates. GDP increased at an annual rate of 4.8% in Q1 after seeing 1.7% growth in Q4, slightly below the expected growth of 4.9%. Quarterly earnings are also seen in the spotlight, with shares of Microsoft ((MSFT)) under pressure in pre-market trading after the company reported weaker-than-expected Q3 results and provided disappointing guidance for the Q4. Among the companies reporting robust earnings, Chevron Corp. ((CVX)) posted 49% profit jump to $4 billion, or $1.80 per share on 31% revenue growth of $54.6 billion. The company’s quarterly results exceeded the average analyst estimate by two cents.

[R]GDP grew in line with expectations.[/R]
Friday morning, the Department of Commerce released its highly anticipated advanced report on first quarter gross domestic product. The report showed that GDP grew roughly in line with analyst estimates. The Commerce Department said that GDP increased at an annual rate of 4.8 percent in the first quarter after seeing 1.7 percent growth in the fourth quarter. Economists had been expecting GDP to grow by about 4.9 percent. The first quarter GDP growth reflected a significant increase in consumer spending, which rose 5.5 percent for the quarter after a much more modest 0.9 percent increase in the fourth quarter. Increased equipment and software spending, exports, and federal spending also contributed to the growth. The growth was partly offset by a downturn in private inventory investment as well as an increase in imports, which are a subtraction in the calculation of GDP. The Commerce Department also said that its reading on consumer prices excluding food and energy prices rose 2.0 percent in the first quarter following a 2.4 percent increase in the fourth quarter. The deceleration may help to offset inflation concerns.

Crude oil prices declined on receding fuel supply concerns but kept hovering over $70 as tensions over Iran’s nuclear program weighed. Light sweet crude June delivery fell 33 cents to $70.64 a barrel. London Brent dropped 35 cents to $70.56. Gold prices regained ground after the sharp drop yesterday, following China’s decision to raise its interest rates. Gold for June delivery rose $4.60 to $641.20 per troy ounce. Silver July delivery gained 13 cents to $12.72. Copper added about 1 cent to trade at $3.34 a pound. The U.S. dollar dropped to an eight-month low vs. the euro but rose vs. the yen on economic data. The euro traded up 0.1% at $1.2551. The dollar bought 114.28 yen, up 0.1%. The British pound was quoted at $1.8086, up 0.4%.

Snap-On Inc, ((SNA)), tool maker, reported Q1 earnings of 37 cents a share, up from a profit of 31 cents a share a year-earlier despite sales decline, beating analysts’ estimates for a profit of 28 cents a share.

Automatic Data Processing Inc, ((APD)), data and transaction processor, reported Q3 net income advanced to 64 cents a share, up from 57 cents a share in the year-ago period. Sales increased 10% to $2.44 billion from $2.22 billion in Q3. The company beat analysts’ forecasts by a penny.

Simon Property Group Inc, ((SPG)), real estate properties operator, reported Q1 net income increased to 47 cents a share, from 26 cents a share in the year-ago period. The company added that funds from operations advanced to $1.26 a share from $1.12 the prior year. The company topped analysts’ estimates for earnings of 23 cents a share, and funds from operations of $1.20.

The Lamson & Sessions Co, ((LMS)), telecommunications and engineered sewer products manufacturer, reported Q1 net income advanced almost four times to 58 cents a share, from 15 cents a share in the year-earlier period on 37% revenue growth, beating analysts views for earnings of 55 cents a share.

American Axle & Manufacturing Holdings Inc, ((AXL)), driveline systems producer, reported its Q1 net income dropped to 17 cents a share, from 26 cents a share in the year-ago period. The company added the 2006 results incorporated a tax-related gain of 6 cents a share and a $10.4 million rise in non-cash expenses. The company missed analysts’ estimate of 19 cents a share.

Corinthian Colleges Inc, ((COCO)), education group, reported Q3 net income dropped to 17 cents a share, from 23 cents a share a year earlier. The company added that current earnings incorporate stock-option expensing costs of 2 cents a share. Revenue dropped to $250.3 million from $252.8 million. The company also announced that the sale of its Corporate Education Services division reduced revenue by around $7.1 million in Q3. If not for this divestiture, revenue advanced by around $4.6 million, or 1.9% in Q3. The company beat analyst estimate for earnings of 16 cents a share. Corinthian is expecting Q4 earnings in the range of 13 cents to 15 cents a share, including aRound 1 cent a share for stock-option expensing.


[R]8:15AM European averages dropped for a fourth day in a row.[/R]
European markets posted losses for a fourth consecutive session. Averages were dragged down by weakness in oil companies as crude oil prices further declined to reach levels above $70 a barrel, sharply down from recent highs of $75. The Italian Eni and the French Total posted the steepest drop among oil majors. In currency markets the euro gained vs. the dollar on economic data. The German DAX 30 slipped 0.8%, dragged by 4.2% loss for car maker Volkswagen on lower-than-expected quarterly earnings and 2.4% decline for Siemens due to a brokerage downgrade. The French CAC 40 lost 0.4% and London FTSE 100 fell 0.3%.


[R]7:30AM Asian Markets finished lower.[/R]
Asian-Pacific benchmarks closed lower. The Nikkei, Japan’s benchmark ended down 208.31 points, or 1.2% to 16,906.23. .The low came in the wake of China’s decision to tighten its grip on its soaring money supply growth, for fears of a potential investment bubble. Japan’s benchmark was also influenced by a poor Sony performance, shedding 5.8% after reporting a first-quarter loss and an uncertain outlook for the fiscal year. Other blue chips faired better, Canon advanced 2.3%, reporting 18.7% quarterly growth. Pioneer rose 5.3%, despite announcing $143 million operating loss on restructuring issues. Kospi, Seoul’s benchmark shed 2.5%, led by government data and Hyundai Motors legal problems. Hong Kong’ Hang Seng also ended 0.5% lower or 16,661.30 making it 1.5% for the week.