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Bourses end flat in volatile trade

AFTER witnessing volatile movements the stock market ended with a marginal gain last week. Investors adopted a cautious approach in view of fears over a slowdown in foreign fund flows and a strengthening of the dollar. Though the latest batch of corporate numbers for the third quarter has been encouraging, renewed hardening of international oil prices had a bearing on the market which had only four sessions on account of a holiday on Friday for Bakrid.

The 30-share Sensex (the benchmark index of the Bombay Stock Exchange) ended with a gain of 9.42 points at 6183.24 against the previous week-end close of 6173.828. On the National Stock Exchange, the 50-share NSE S & P CNX Nifty index shed 6.10 points for the week to end at 1925.30.

With alternate bouts of buying and selling the markets displayed extreme volatility on all trading days with the Sensex moving within a band of 100 points each day.

Foreign funds remained net sellers last week. In the first three sessions of the week, they were net sellers to the extent of Rs. 226 crores.

There were major developments during the later part of the week. The Zurich-based Holcim entered into an alliance with Ambuja Cement India Limited (ACIL) to acquire a majority stake in ACC through an open offer at Rs. 370 per share. ACIL at present holds 13.8 per cent stake in ACC and intends to increase its shareholding to 50.01 per cent. The ACC stock shed 6 per cent on Thursday after the news as it was felt that the offer price was not attractive. Gujarat Ambuja Cements also lost 5 per cent.

ITC went up by 11 per cent on Thursday after the Supreme Court ruled that the State governments have no legislative competence to impose luxury tax on goods, including cigarettes and gutka. Fresh buying was in evidence in other cigarette stocks such as GTC and Godfrey Phillips.

Liquor stocks such as McDowell, GM Breweries and Shaw Wallace gained ground following the announcement that the value added tax (VAT) system will exempt liquor.

Good corporate results

Of the quarterly results of 333 companies available with capitalmarket.com, the aggregate net profit of 327 companies rose 36.20 per cent to Rs. 6,082 crores on a 19 per cent rise in sales to Rs. 49,013 crores.

On the corporate front, Reliance Energy has posted improved results with a 151 per cent rise in net profit to Rs. 134.22 crores while the turnover was Rs. 1,135 crores (Rs. 899 crores).

ACC posted a 138 per cent rise in net profit to Rs. 53.08 crores for the three months ended December 31, 2004 from Rs. 22.32 crores in the corresponding period in 2003. The total income was Rs. 988 crores (Rs. 791 crores). Gujarat Ambuja Cements group reported a 50 per cent rise in net profit to Rs. 91.64 crores from Rs. 61.11 crores. The turnover was Rs. 776.70 crores (Rs. 525.41 crores).

Steel companies have announced impressive third quarter numbers. Tata Steel has doubled its net profit to Rs. 890.51 crores from Rs. 447.17 crores. Income, net of excise, stood at Rs. 3,765.09 crores (Rs. 2,658.27 crores).

IPCL for its part reported 133 per cent rise in net profit at Rs. 189 crores while total income excluding excise stood at Rs. 1,964 crores (Rs. 2,815 crores).

On the software side Satyam Computers announced a 19.8 per cent increase in its net profit at Rs. 174.78 crores (Rs. 145.86 crores) on a total income of Rs. 893.84 crores (Rs. 691.15 crores).

Hughes Software posted a 15.5 per cent increase in net profit at Rs. 27.60 crores on total income of Rs. 123.50 crores.

On the pharma front, Ranbaxy recorded a 29 per cent fall in its net profit to Rs. 72.26 crores in the quarter from Rs. 102.02 crores while the total income rose to Rs. 972.36 crores from Rs. 823.70 crores. Cipla on the other hand reported a 67 per cent rise in its net profit at Rs. 125.67 crores and the total income rose to Rs. 637.32 crores from Rs. 489.43 crores.

In the banking sector ICICI Bank reported 18 per cent rise in net profit to Rs. 517.68 crores while UTI Bank posted a 35 per cent rise in net profit to Rs. 101.15 crores. Allahabad Bank for its part posted a 62 percent rise in net profit at Rs. 159.25 crores against Rs. 98.36 crores.

There were several significant turnarounds in quarterly results.

Major corporates coming out with quarterly earning numbers in the current week include Maruti Udyog, Canara Bank, MRPL, L & T, Tata Teleservices, Ashok Leyland, Federal Bank, HDFC, TVS Motor, HPCL, SAIL, ONGC, Gail India, State Bank of India and MTNL.

Interest rates up

Interest rates moved up marginally during the week. The ten year government security was traded at 6.72 per cent and the five year security at 6.47 per cent. The year on year inflation came down to 5.60 per cent for the week ended January 8.

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