3:30 Markets had quite a volatile session today as the Sensex and the Nifty fell one percent each when news about the S&P revision on India outlook to negative from stable hit the streets. However, they started recovering during the latter part of the day and the Sensex closed at 17151, down 56 points while the Nifty managed to close above the 5200 mark.
S&P downgrade led to a kneejerk reaction pushing the index down to 5150 levels. This was followed by an immediate recovery back to 5200. We expect Nifty to trade in the range of 5130-5250 and settle around the 5200 mark for the April series. Selling pressure is expected in select frontline and midcap stocks. said, Sahaj Agrawal, Associate Vice President – Derivatives Research, Kotak Securities
The day also witnessed the results of Wipro, whose shares tanked 7 percent after it gave a muted guidance for the June 2012 quarter. Commenting on Wipro’s nos, Mr. Dipen Shah, Head of Fundamental Research, Kotak Securities said
“Wipro’s numbers for 4Q were below our estimates on the IT revenues and margin front. The guidance of a flattish revenue growth in 1Q was also disappointing. The management has indicated this is due to some one-off issues in the India business. We will wait for further developments on the same. The stock price of Wipro had reflected strength in the past few days on expectations of relatively better results and guidance. The stock will likely move up sustainably on better visibility on the revenue growth.”
Among the 30-share Sensex pack, 12 stocks ended in green while 17 were in red. The biggest loser was GAIL (-3.35 percent), BHEL (-2.3 percent), TCS (-1.9 percent), Coal India (-1.9 percent).
Bharti Airtel recovered today as the stock was the biggest gainer and closed up 2.25 percent followed by Hero MotoCorp (1.9 percent) and Sterlite Inds (1.89 percent).
Petronet LNG shares also fell by 5 percent after it reported disappointing profit numbers yesterday post market hours. However, one of the biggest losers was the stock of Zensar Tech which crashed by 17 percent today.
S&P has now revised its outlook on Infy, Wipro, and TCS to negative from stable.
While Infosys is trading flat at 2352 per share, Wipro continues to trade lower by 7 post but that was more or less due to its muted guidance for the June 2012 quarter. TCS is also down 2 percent to Rs 1171 per share.
Yes Bank gains 2.5% after posting higher profit nos at Rs 272 cr Vs CNBC-TV18 Poll Of Rs 259 cr
Markets in recovery mode post S&P revision
S&P has also downgraded 4 Indian companies to negative. PFC has reacted to this news and is down by almost 5 percent.
Here is an excerpt from their press release :
We have equalized the ratings and outlooks on India EXIM, IIFCL, and IRFC with the sovereign rating and outlook. This reflects the entities’ integral linkages with, and their critical roles to, the government of India. We believe there is an “almost certain” likelihood of extraordinary government support to these GREs.
We view PFC’s link to the government as very strong and its role as critical. We therefore assess an “extremely high” likelihood of extraordinary government support to the company. Such level of support, combined with PFC’s stand-alone credit profile, results in a rating that is at the same level as the rating on India.
Markets are in a recover mode post the S&P down grade. The Sensex has recovered from its intra day low of 17019 points and is now down by 43 points to 17160 while the Nifty regains the 5200 mark.
The recovery in markets could also be attributed to the recovery in the European markets as France’s CAC and Germany’s DAX gained 1% each while Britain’s FTSE rose 0.3%.
Also, in reaction to news channel, Moody’s Investor Service informed Reuters that it has not issued any new statement on India’s sovereign rating and outlook.
S&P lowered the long term sovereign credit rating outlook to negative from stable. Moody’s meanwhile reaffirmed its ratings to stable. Here are some points from Moody’s release -
•India’s Susceptibility To Event Risk Seen Low
•Current A/c To Remain In Deficit, Rs To Face Pressure
•A Downgrade Would Be Triggered By Material Rise In Debt:GDP
•See India’s Strong Savings, Invest Rate Sustaining Growth
•See India’s Eco Strength As Moderate On Relative Basis cnbc-tv
•Baa3 Rating Also Incorporates Challenges
•See India’s Strong Savings, Invest Rate Sustaining
•See FY13 Inflation At 8.5%
S&P downgrades 4 Indian cos to negative, PFC falls 6.5%
S&P downgrades 4 Indian cos to negative. This includes companies like PFC (-6.5 percent), IRFC, IIFC and Exim Bank.
While S&P is currently worried that if the current situation deteriorates , it could lead to a downgrade, however Moody has re-affirmed India’s rating of Baa3.
Takahira Ogawa, S&P, says that at this stage the chances of a downgrade have increased and this could change depending on the government policy and macro-environment policy.
Nifty hits nearly 4-week low as S&P cuts India’s outlook to negative
Post the S&P India outlook revision, the markets reacted very sharply as both the Nifty and Sensex lost over one percent. However, after clarification that this was a change in outlook to negative and not a downgrade, markets started recovery.
Nifty is now down 0.65 percent to 5188 while the Sensex is down 100 pts to 17105.
S&P revises India outlook to negative, Nifty below 5200
12:30 Standard & Poor’s Ratings Services today affirmed the ‘BBB-’ long-term and ‘A-3′ short-term unsolicited sovereign credit ratings on India. Standard & Poor’s also revised the outlook on the long-term rating to negative from stable. The transfer and convertibility assessment for India is unchanged at ‘BBB+’.
“The outlook revision reflects our view of at least a one-in-three likelihood of a downgrade if the external position continues to deteriorate, growth prospects diminish, or progress on fiscal reforms remains slow in a weakened political setting,” said Standard & Poor’s credit analyst Takahira Ogawa, in thier release.
The negative outlook signals at least a one-in-three likelihood of the downgrade of India’s sovereign ratings within the next 24 months. A downgrade is likely if the country’s economic growth prospects dim, its external position deteriorates, its political climate worsens, or fiscal reforms slow.
On the other hand, the ratings could stabilize again if the government implements initiatives to reduce structural fiscal deficits and to improve its investment climate. Fiscal measures could include an increase in domestic prices and a more efficient use of fuel and fertilizer subsidies, or an early implementation of the goods and service tax.
Markets fell sharply after the S&P release as the Sensex crashed by 150 points (1 percent fall) while the Nity fell by 44 points to 5178, well below the crucial 5200 mark.
The market breath is negative as 991 stocks have declined while 398 are in green while 88 are the same.
Yes Bank gains 1.8% ahead of results, markets flat
11:30 am Yes Bank is up 1.7 percent ahead of its results. It is expected to post 27% year-on-year jump in the fourth quarter net profit at Rs 259 crore while net interest income or the difference between interests earned and paid out would grow at 30% to Rs 451.5 crore. Loans would expand at 14% y-o-y, according to a CNBC-TV18 Poll.
Other stocks whose results are out today include – EID Parry (+1%), IndiaBulls real estate (+0.58%), LIC Housing Finance (-2.5%), Motilal Oswal Financial Services (+0.52%), Nestle India (1.15%), Oberoi Realty (0.42%) and Sterlite Industries (1.42%).
Bajaj Auto launches New Discover at Rs 42,000, stock up 1.3 percent to Rs 1669. Rajiv Bajaj expects to sell 100,000 Discovers per month in domestic markets.
10:30 am Markets are more or less flat with the Sensex trading up just 21 points to 17228 while the Nifty is up 4 points to 5226. The market breath is positive with 745 stocks have advanced , 447 have declined while 79 are the same.
Among the 30-share Sensex pack, 21 stocks are in the green while 9 are in the red. Markers appear to be a nervous around news flow from Europe due to political uncertainty emerging and Spain going into recession.
Wipro fall 7% on muted guidance; Sensex flat
Wipro continues to trade lower by 7.5 percent to Rs 408 per share after it posted muted guidance for June 2012 quarter. TCS, which had galloped by 12 percent yesterday is down a percent followed by Infosys (-1 percent).
Telecom stocks like Bharti Airtel have regained a bit as the stock is up 2.18 percent to Rs 314 per share. Idea is trading down 0.6 percent. The company will be declaring its results tomorrow. MindTree hit a new high to Rs 557 per share.
Petronet is down 1 percent post the company’s lower profit numbers. Net profit came in at Rs 245 cr, down 17 percent sequentially.
IVRCL Infra is up 4 percent to Rs 63.35 per share. JM Financial Products has increased its stake to 5 percent with acquisition of additional shares.
9:30 am The BSE Sensex and NSE Nifty started of trade lower on Wednesday due to fall in technology stocks, but immediately recovered somewhat led by gains in banks, metals, oil & gas and healthcare stocks. Overall the indices were moving around their previous closing values.
Technology stocks dropped on the back of some unwinding of long positions after yesterday’s sharp rally. Wipro tanked 7% as its fourth quarter numbers were not too great and its guidance for the first quarter of FY13 is muted. It forecasted IT services revenue at USD 1.52-1.55 billion for the April-June quarter, a growth of just 0.6% sequentially