Friday, October 17, 2014

Sensex gains 109 pts; banks lead, HCL Tech & TCS tank 9%

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Equity benchmarks closed off day's high ahead of Maharashtra and Haryana state elections results that will be announced on Sunday. Indices were directionless since the opening trade but gained strength in last hour of trade to jump as high as 249 points on the Sensex (and to hit 7800 level intraday on positive European cues) before seeing some profit booking in late trade.

The 30-share BSE Sensex climbed 109.19 points to close at 26108.53 and the 50-share NSE Nifty rose 31.50 points to 7779.70 after losing over a percent in previous session.

Experts believe this upmove is not sustainable amid concerns over global growth and consistent selling pressure from foreign institutional investors (FIIs). They advise buying quality stocks on every dip.

Sanjeev Zarbade of Kotak Securities believes the performance of the Indian equities remains contingent on resumption of FII flows.

While Mehraboon Irani expects levels of 7400 to be breached by the market on the downside, he suggests investors to buy into stocks of their choice. He says the global factors will continue to have a significant impact on the market and any negative news may lead to lower rupee levels like 62 against the dollar.

However, reducing inflation, lower commodity prices and expected reforms push remain significant tailwinds for the markets, says Zarbade.

Banks topped the buying list today with the Bank Nifty rising 2.5 percent as top lenders State Bank of India, HDFC Bank and ICICI Bank rallied 2-3 percent while housing finance company HDFC gained 1.7 percent.

Axis Bank rose 2 percent ahead of results that announced post market hours. The private sector lender met street expectations with the second quarter net profit rising 18.3 percent Y-o-Y led by higher other income and net interest income but higher provisions limited profitability. NII jumped 20 percent with stable asset quality.

Two-wheeler maker Hero Motocorp rallied 3 percent on reporting a 58 percent growth in Q2 profits led by other income.

Zee Entertainment gained 3 percent after the company beat expectations on operational front. Earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 3.5 percent to Rs 321 crore and margin expanded by 50 basis points to 28.7 percent on lower operating cost. Analysts had expected both at Rs 320 crore and 27.5 percent, respectively.

Larsen and Toubro, BHEL, Mahindra and Mahindra, Bharti Airtel, Cipla and Tata Power were other prominent gainers with 2-3.4 percent upside.

However, technology stocks saw huge selling pressure with the CNX IT index falling 4 percent. It was a twin blow for the tech sector; TCS tanked nearly 9 percent after dollar revenue growth missed expectations. The company said softness in certain businesses may continue for two more quarters and that meeting FY14 growth will be difficult in FY15.

HCL Technologies too took a hard knock on similar growth worries, falling 9 percent. Dollar revenue for Q1 came in lower than estimate at USD 1,433 million.

Sesa Sterlite, Hindalco, Tata Motors, Wipro and Jindal Steel fell 1-2.8 percent.

About 1335 shares advanced while 1505 shares declined on the Bombay Stock Exchange.

Meanwhile, the Indian rupee recovered sharply, up 39 paise to close at 61.44 a dollar after falling to 7-month low of 61.83 in previous session. Fresh selling of dollars by exporters and banks supported the rupeerecovery.

On the global front, European markets gained more than a 1 percent while Asian markets like Japan and Taiwan Weighted fell another 1-1.5 percent after yesterday's blow. A comment from hawkish Federal Reserve official James Bullard on Thursday that the Fed should continue bond buying lifted sentiment and surprised many observers.
Source : Moneycontrol

Thursday, October 16, 2014

Wall Street: US stocks drop amid global equity selloff

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NEW YORK: US stocks dropped sharply in early trade Thursday, following international markets downward as anxiety over global growth continued to prompt selling.

About 30 minutes into trade, the Dow Jones Industrial Average stood at 16,062.34, down 79.40 points (0.49 per cent).

The broad-based S&P 500 fell 13.75 (0.74 per cent) to 1,848.74, while the tech-rich Nasdaq Composite Index tumbled 43.05 (1.02 per cent) to 4,172.27.

Equity markets in Britain and France were down more than 1.0 per cent. Asian markets also fell sharply, with Japan's Nikkei tumbling 2.22 per cent.

"Global risk aversion is persisting amid exacerbated global growth concerns, fueled by yesterday's surprising decline in US retail sales," said a market note from Charles Schwab.

"Moreover, a flare-up in Greek debt concerns, festering Ebola fears, and heightened geopolitical concerns are adding to the dampened global mood."

Thursday's declines move the market closer to a full-blown correction, normally considered a drop of 10-20 per cent. The S&P 500 has fallen about eight per cent since its mid-September all-time high.

Investors brushed off positive news, such as a drop in initial jobless claims to 264,000, the lowest level since April 2000, according to the Department of Labor.

Dow member Goldman Sachs fell 2.1 per cent despite reporting a 50 per cent increase in third-quarter earnings to $2.14 billion in results that bested Wall Street expectations by a wide margin.

Video-streaming company Netflix plummeted 22.7 per cent on disappointing subscriber growth figures. The video-streaming company said it gained just three million members in the past quarter, to boost its subscribers to 53.1 million worldwide.

Apple fell 1.5 per cent ahead of an event in California later Thursday at which it is expected to unveil new versions of the iPad.

Chesapeake Energy bolted 13.5 per cent higher following news it will sell shale oil and gas assets to Southwestern Energy for $5.4 billion. Southwestern lost 6.9 per cent.

EBay dropped 4.9 per cent as it projected fourth-quarter revenues of $4.85-$4.95 billion, below analyst forecasts for $5.16 billion. The profit outlook was also on the low end of expectations.

Bond prices were mixed. The yield on the 10-year US Treasury held steady at 2.09 per cent, the same level as Wednesday, while the 30-year stood at 2.87 per cent, down from 2.88 per cent. Bond prices and yields move inversely.

Oil prices briefly dipped below $80 a barrel for the US benchmark contract, before coming back to 80.75, off $1.03 from Wednesday's close.
Source : economictimes

Tuesday, October 14, 2014

Wall Street bounces after 3-day slump on earnings hope

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NEW YORK: US stocks were higher on Tuesday, rebounding after the S&P 500's worst three-day drop since November 2011, as bullish investors hoped a solid earnings season would ease global growth concerns.

Citigroup, up 3.2 per cent to $51.48, was among the top boosts to the benchmark S&P index after the bank posted better-than-expected quarterly results and said it would pull out of consumer banking in 11 markets.

But JPMorgan Chase shares lost 1.1 per cent to $57.54, after the biggest US bank posted third-quarter earnings. Wells Fargo, the fourth largest US bank, lost 1.6 per cent to $49.39 after its results.

The S&P financial index gained 0.7 per cent.

Johnson & Johnson shares lost 1.3 per cent to $97.82 even after the diversified healthcare company reported better-than-expected quarterly earnings on the back of strong sales for a new hepatitis C drug.

The index closed below its 200-day moving average for the first time since Nov. 16, 2012, on Monday and is now down 6.1 per cent from its record closing high on September 18.

S&P 500 companies are expected to show earnings growth of 6.4 per cent in the third quarter, according to Thomson Reuters data, with revenue growth expected at 4 per cent. After the close, Dow component and chipmaker Intel is set to post results.

At 10:58am, the Dow Jones industrial average rose 84.83 points, or 0.52 per cent, to 16,405.9, the S&P 500 gained 12.45 points, or 0.66 per cent, to 1,887.19 and the Nasdaq Composite added 39.84 points, or 0.95 per cent, to 4,253.50.

The largest per centage gainer on the S&P 500 was Delta Air Lines, up 5.6 per cent, while the largest per centage decliner was ONEOK Inc, down 3.3 per cent.

The largest per centage gainer on the Nasdaq 100 was NXP Semiconductors, up 5.1 per cent, while the largest per centage decliner was Autodesk, down 2.1 per cent.

Among the most active stocks on the NYSE were Bank Of America, up 0.67 per cent to $16.51; Petrobras, up 0.23 per cent to $17.31; and Advanced Micro Devices, down 1.09 per cent to $2.71.

On the Nasdaq, APPLE, up 0.3 per cent to $100.08, and Facebook, up 0.5 per cent to $73.34, were among the most actively traded.

Advancing issues were outnumbering declining ones on the NYSE by 2,020 to 953, for a 2.12-to-1 ratio on the upside; on the Nasdaq, 1,862 issues were rising and 690 falling for a 2.70-to-1 ratio favoring advancers.

The benchmark S&P 500 index was posting 6 new 52-week highs and 23 new lows; the Nasdaq Composite was recording 16 new highs and 121 new lows.