The third quarter 2012 earnings of US corporates are hurting market sentiments. Companies from Apple and Intel to Caterpillar and Alcoa posted results that were below or just about met analysts estimates but more importantly guidance from most corporates were not positive. Apple the largest company by market capitalization in the world posted healthy numbers but the market expects a lot more from the company given its stature. Many US companies have indicated that they will cut jobs in face of uncertain economy and tough business conditions.
India second quarter corporate results were positive with many companies including ICICI Bank, L&T, Mahindra and Mahindra, ITC and HUL posting numbers that were above estimates. The RBI policy on the 30th of October 2012 could lead to positive sentiments in the market if the central bank cuts repo rates (Read fixed income).
The derivative market saw open interest come off in Nifty index near month futures while implied volatility on Nifty index options were steady. Derivative markets are not positioned for any positive or negatives coming out of RBI policy review.
The Indian Rupee (INR) strengthened marginally week on week as traders cut long USD position ahead of RBI policy. The INR is likely to strengthen from current levels if policy is positive for markets.
The US election slated for November 2012 will keep markets in a narrow range. US employment numbers will be keenly watched for direction on US economy. The third quarter 2012 US GDP growth came in at 2%, which was above market expectations. However the potential “Fiscal Cliff” that the US faces from 2013 will keep markets worried.
Select gainers and losers in BSE 500 last week.
Contributed by research associate Ketan Verma
Indiabulls Financial Services gained on strong Q2 result. In the second quarter, which ended on September 30,2012 the company posted a rise of 17.54% in its net profit.
YES Bank reported a 30% growth in net profit to Rs 306.08 crore for the July-September quarter.
State-owned lender Oriental Bank of Commerce reported a whopping 80 per cent jump in its net profit for the second quarter ended September 30 on the back of recovery from bad loans.
Godrej group chairman Adi Godrej has said the diversified conglomerate has begun its third and final phase of expansion in Africa, covering most key markets in the continent where it is “heavily invested”. The group is growing at 25-30% in Africa, Godrej said . “In addition, we are growing through acquisitions. If you add acquisitions, we are growing much faster,” said the chairman.
IRB stock came under heavy selling due to the controversy on its dealings with a political figure.
Exide Industries, India’s biggest lead acid storage battery maker, reported 135% increase in quarterly net profit, but failed to beat the expectation of the market leading to its stock price falling.