Markets Cut Losses But Close In Red

After a negative start today, the Indian markets managed to cut its losses but still ended in the red zone. The BSE Sensex closed 56 points down at 18846 and Nifty closed 21 points lower at 5738. The Indian markets traded in line with the global markets, which are concerned over the fiscal cliff in the US.

In Asia, the stocks fell over similar concerns. The Hang Seng fell sharply by 2.5% after data showed that the local economy has shrunk for two consecutive quarters, making a recession underway. The Japanese and Chinese markets also closed over 1.5% lower.

The European markets have shown some resistance after yesterday’s fall. Yesterday, ECB chief Mario Draghi said that the debt crisis in Europe has now started to take a toll on Germany. Today, however, the markets rebounded after the Greek parliament approved a batch of austerity measures, which is a prerequisite to secure the next tranche of bailout money from international lenders.

The markets are now awaiting key policy decisions from the ECB and the Bank of England that are due today.

Back home, on the sectoral front, the Realty index gained over 2.3%. Realty stocks such as Godrej Properties, Unitech, Phoenix Mills, Indiabulls Real Estate and DB Realty appreciated between 2%-6% over strong buying. The Auto index also jumped over 1% thanks to the support provided by Tata Motors after its Q2 results declaration yesterday. CD, FMCG and Teck closed on a flat note, while all the others were in the red at closing. The Capital Goods index was down by 1.47%.

Among the Sensex stocks, the shares of Tata Motors jumped 5.5% after the company reported 20% jump in its revenues. JLR continued its robust performance, with a YoY growth of 13% in revenues and a 77.33% growth in its net profit. Bharti Airtel saw some recovery in its share price after its quarterly results announcement. SBI also has gone up by 1.32% ahead of its results due tomorrow.

Tata Power, on the other hand, was the top loser as it lost 2.12%. The company posted a loss of Rs 83 crore against expectations of a profit of over Rs 270 crore. L&T also saw a 2% decline. GAIL India and ICICI Bank were also down by 1.98% and 1.48% respectively. Dr Reddy’s Labs saw some profit booking after a recent rally - its shares fell by 1.48% to close at Rs 1076.05. Maruti Suzuki was down 0.54% on news that that its works were to hold a rally today. The shares of Cipla closed negative after the company cut the prices of its cancer drugs.

ONGC's shares closed 0.5% down today. In its results declared after market hours, the company reported revenues of Rs 19790 crore. Its net profit came in better at Rs 5896 crore against an expected figure of Rs 5600 crore.

Sun Pharma lost 0.76% in today's trades. The pharmaceuticals firm came out with its Q2 results after market hours, reporting a 40% jump in its consolidated revenues to touch Rs 2657 crore. Its domestic revenues grew by 15% and that in the international formulations grew by 21%. The US finished dosages grew by 38%. Its EBITDA margins have improved by 300 bps to 44%. The net profit, however, fell on account of provision of Rs 584 crore against potential damage in respect of the litigation related to the generic of Protonix.

Another pharma major Ranbaxy also came out with its quarterly numbers today. Its total income increased from Rs 2132 crore for the quarter ended Sept 30, 2011 to Rs 2757 crore for the quarter ended Sept 30, 2012. The net profit was at Rs 757 crore against a loss of Rs 456 core in the same quarter last fiscal. The base business in USA has continued to grow, which is a good sign.

The shares of Biocon are seeing positive movement in the share price, which saw a jump of 4.25% by closing today. Jubilant Foodworks also saw a gain of 3% after its results came in yesterday.

The advance-decline ratio on the BSE remained largely mixed, with a total of 46% advances and 49% declines.

With many results coming in positive, the sentiment may show further improvement in the near term. Also, with the festive season beginning next week, the markets may start gaining here on. Investors should take positions accordingly.