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Money Jul 27, 2012

Sensex snaps 2-day fall, ICICI leads rally on strong asset quality

By Firstbiz Staff

After a two-day fall, Indian equity markets finally showed some fervor on the last trading session of the week as investors bet large on risk assets such as equities ahead of the next big trigger, which is the Reserve Bank of India's quarterly policy review on July 31, 2012.

After closing almost 207 points lower on Thursday, the Sensex jumped 199 points up and closed at 16,839.19 points. The Nifty gained 1.13 percent and ended at 5,099.85 points after Thursday's lowest close since June.

Reuters

Profit booking in the latter half erased some of the gains. PSU banks were lower after disappointing asset quality data from some of the larger PSU banks.

"However, for the week, the indices ended about 2% lower. Continuing concerns on monsoons and lack of policy reform announcements had a negative impact on sentiments. The comments from the ECB President did help. However, it remains to be seen whether the ECB follows up the promises with action or not," said Dipen Shah, Head of Private Client Group Research, Kotak Securities

On the global front, Asian shares rallied, after the European Central Bank rejuvenated risk appetite by committing to do whatever necessary to protect the euro zone from collapse. However, European shares turned flat on concerns over political hurdles which could hinder any fresh stimulus measures from the European Central Bank (ECB) to tackle the region's sovereign debt crisis.

Draghi's remarks have also set off speculation about fresh monetary easing measures from the ECB, including another round of LTRO.

ICICI Bank, shot higher by over two percent on reporting better than expected (36%) jump in its net profit for first quarter (April-June) at Rs 1815 crore, on Y-o-Y basis, driven by a drop in non-performing assets (NPAs) coupled with a robust growth in loan book that expanded 22% y-o-y to Rs 2.68 lakh crore.

NTPC, jumped over half a percent, on surpassing market expectations with a 20% rise in its fiscal-first-quarter.

State owned lender Punjab National Bank (PNB) tanked over five percent on missing Q1 estimates. The bank registered lower than expected 12.76% year-on-year growth in net profit at Rs 1,246 crore in the quarter ended March 2012 due to higher non-performing assets (NPAs).

After media reports of CBI questioning Dayanidhi Maran on the Aircel-Maxis deal, shares of SUN TV and Spicejet, both promoted by Maran took a plunge of almost 11 percent.

The top gainers on the Sensex were Tata Motors up 4.59%, Tata Steel up 4.01%, Sterlite Industries up 3.68%, HDFC Bank up 3.42% and Hindalco Industries up 3.20%.

Top losers on both the indexes were PNB, SBI, Bank of Baroda, JP Associates, Kotak Mahindra Bank, BHEL, DLF and Hero MotoCorp.

On the BSE-500, Era InfraEngineering, Tulip Telecom, MVL and Radico Khaitan were the top gainers. Glodyne Technoserve, Parsvnath Developers, Deccan Chronicle, Sun TV Network, SpiceJet, Pipavav Defence, Union Bank of India, Puravankara Projects and Central Bank of India were the top losers on the index.

by Firstbiz Staff