Market Pulse - 25 Jul, 2013

Markets closed lower following the expiry of July derivative contracts weighed down by profit taking in FMCG sector shares after recent gains, led by ITC and Hindustan Unilever after recent gains. S&P BSE Sensex closed at 19,805 down 286 points while S&P CNX Nifty closed at 5,908 down 83 points. The Sensex and Nifty touched an intra-day low of 19,764 mark and 5,896 levels, respectively.

Sectoral wise, BSE FMCG index dropped by over 3% followed by counters like Power, Metal, Capital Goods, Healthcare, PSU, Bankex and IT, all declining between 1-2%. However, BSE Auto and TECk indices gained marginally.

Index gainers were, Auto major Hero MotoCorp rallied by over 4% after reporting 100 bps improvement in operating margins at 14.8% for the first quarter ended June 30, 2013 on sequential basis due to 10% quarter-on-quarter decline in other expenditure. The company had operating margins at 13.8% in March quarter.

From the FMCG space, ITC ended lower by 4.57% at Rs 359 after reporting 18% year-on-year (yoy) jump in net profit at Rs 1,891 crore on back of strong performance across business segments. Analyst on an average had expected profit of Rs 1,869 crore from the fast moving consumer goods (FMCG) major.

Hindustan Unilever (HUL) ended lower by over 3% at Rs 687, after its parent firm Unilever said that growth is slowing in emerging markets, as macro-economic headwinds influence consumer behavior.

Wipro slipped 4% to Rs 376 on NSE, ahead of its April-June (Q1) earnings tomorrow. Analysts expect the IT major to report a flat revenue growth in the recently concluded quarter.

Other notable losers were L&T, BHEL, Tata Power, JSPL, RIL, Sterlite, Cipla, Sun Pharma and Coal India.

The Rupee advanced up by paise to 59.10/dollar on fresh dollar selling by banks and exporters, tracking a weakness in the US currency overseas.

Zee Entertainment Enterprises rose up by 6%, the company reported a better-than-expected 43% year-on-year (yoy) jump in its consolidated net profit at Rs 225 crore for the quarter ended June 30, 2013 (Q1) due to higher advertising revenues and other income.

Jaiprakash Associates crashed 9%, extending its previous day fall of 6%, after Deutsche Bank downgraded the stock to sell from hold citing higher-than-expected debt.

Central Bank of India tanked 8%, after reporting a sharp decline in net profit by 94% year-on-year (yoy) at Rs 22 crore for the quarter ended June 30, 2013 (Q1) due to higher provisions for rising bad loans.

Ambuja Cement crashed by 11%, after reporting poor quarterly results due to low demand and poor pricing.

Novartis India dropped by 6%, after company reported decline in nits net profit by 49% year-on-year (yoy) at Rs 139 crore for the quarter June 30, 2013 due to rupee depreciation and lower sales volume.

The market breadth in BSE ended dismal 1,418 shares declining and 850 shares advancing.

Posted in: Indian Market Tips