5th August, 2013 : Comments by Amar Ambani, Head of Research, India Infoline
The Indian equity market ended on a flat note on Monday amid bouts of volatility during the day. The Nifty ended below the 5,700 mark for the second consecutive day. Metals, banking, IT, FMCG and telecom stocks led the gainers pack. However, the capital goods index fell the most, down 3.6%, followed by power and healthcare indices, down 1% and 0.5%, respectively.
Financial Technologies bounced back 34% after the National Spot Exchange (NSEL) said most trading members have agreed to settle outstanding contracts via a process, which may take several months. The scrip had crashed 73% over the last two sessions after NSEL suspended trading in most forward contracts on Wednesday.
The Sensex closed at 19,182, up 18 points, while the Nifty shut shop at 5, 685, up 7 points over Friday’s close.
The advance-decline ratio favoured the bears. On the Bombay Stock Exchange, 1,128 stocks declined against 1,078 advances, while 133 stocks remained unchanged.
Volatility, as measured by India VIX, edged lower by 0.5% at 20.80. It hit a day’s high of 21.62 and low of 20.56.
BHEL, Asian Paints, BPCL, Bharti Airtel, Bajaj Auto, L&T, Cairn India, Tata Power, HDFC and Tata Motors lost out while Jindal Steel, Jaiprakash Associates, Ambuja Cements, Sesa Goa, Reliance Infrastructure, Coal India, NTPC and Bank of Baroda gained in trade today.
BHEL was the top loser among the 50 Nifty constituents. The stock plunged 20%, hitting a fresh 52-week low. It finally ended at Rs. 120 per share. Commenting on the same, Amar Ambani, Head of Research at IIFL, said BHEL has been downgraded to sell post its Q1 FY14 results. “BHEL Q1 results were quite weak, topline of Rs. 64.5bn was lower than our expectation of Rs. 79bn. Sluggish order inflow momentum going ahead coupled with pressure on margins would lead to earnings de-growth over the next two years.”