Choppy markets end weak on F&O expiry day

Markets ended marginally lower on Thursday following the expiry on July derivative contracts weighed down by selling pressure in index heavyweights.

The 30-share Sensex ended at 16,640 down 206 points or 1.22% and the 50-share Nifty ended at 5,043 down by 67 points or 1.30%. The Sensex and the Nifty reached an intra-day low of 16,598 levels and 5,032 mark, respectively.

On the global front, Japan's Nikkei share average wrestled back almost 1 percent on Thursday, lifting off a seven-week low as investors picked up stocks on better-than-expected earnings, but the rebound was seen as limited because of concerns over global demand. Short-covering lent temporary support for battered stocks, while strong earnings for a few U.S. firms boosted Japanese companies in the same sectors.

European shares and the euro fell on Thursday as persistent worries about Spain and Greece combined with disappointing company earnings to undermine investors' confidence, but moves were limited by talk that central banks may be prompted into action. CAC, DAX and FTSE have dropped between 0.2-1%.

Back home, the country's crucial monsoon rains will improve in coming days, the country's weather office chief said on Thursday, which should narrow the shortfall in rainfall for the current rainy season that began in June.

Agriculture minister Sharad Pawar raised the prospect of drought for the first time this year, saying on Thursday officials would discuss next week the so-far meagre monsoon rains that are key to the economy of this major consumer and producer of food crops.

On the sectoral front, BSE Realty index crashed down by nearly 3% followed by counters like Capital Goods, PSU, Banks, IT and FMCG, all sloping down by almost 2% each. Sectors like Oil & Gas, Power, Metal, Auto and Consumer Durable fell by nearly 1% each. Infact, all the major BSE sectoral indices ended in red zone.

From the Capital Goods space, BHEL and L&T plummeted by almost 2% each. Bharat Heavy Electricals Limited (BHEL) gained in late noon trades after reporting a better-than-expected 13% year-on-year (yoy) growth in net profit at Rs 921 crore for the quarter ended June 2012. Analysts, on an average, expected a net profit of Rs 786 crore from the state-owned capital goods company. 

Banking and financial shares like SBI, ICICI Bank, HDFC Bank and HDFC plunged between 1-3%.

Index heavyweight RIL dropped by over 1%. ONGC declined by over 2%. Shares of state-run

oil exploration and refining companies extended yesterday's losses on media reports that the government is not likely to raise prices of diesel in the near term.

FMCG majors ITC and HUL declined between 1-2%. Diversified business firm ITC Ltd today said its net profit rose 20.21% to Rs 1,602.14 crore during the first quarter ended June 30, 2012. The company had posted net profit of Rs 1,332.72 crore during the same period 2011-12, ITC Ltd said in a filing to the BSE.

Metal shares like Sterlite Inds, JSPL, Coal India, Hindalco and Tata Steel melted between 1-2%.

Technology stocks fell on weak economic data in the US. Wipro, Infosys and TCS dipped between 1-3%.

Tata Motors was the top Sensex loser, down nearly 4%.

From the realty space, Parsvnath Developers, Unitech, DLF and Indiabulls Real cracked between 2-20%.

On the winning side, Sun Pharma was the top Sensex gainer, up over 2%. Bajaj Auto, NTPC, GAIL India, Maruti Suzuki and Dr Reddy's Lab gained between 0.3-2%.

Smart Movers

Bayer CropScience surged 12% on reporting 78% year-on-year (yoy) growth in net profit at Rs 88.74 crore for the quarter ended June 2012 on the back of higher operational income. Net sales grew 17% at Rs 921 crore on y-o-y basis.

SRF Limited tanked over 12% on reporting 73% year-on-year (yoy) drop in net profit at Rs 22 crore for the first quarter ended June, due to mark-to-market loss of Rs 46 crore incurred by the company because of foreign exchange fluctuations. Net sales too dipped 3% at Rs 810 crore on y-o-y basis.

Tips Industries gained 4% after the board of Taurani Brothers-promoted movies and entertainment company approved the buyback of its shares at a maximum price of Rs 90 per share through an open market purchase.

Jubilant FoodWorks dipped over 4% after reporting a decline in operating margins and the same-store sales for the first quarter end June 2012.

Atul Limited rallied 4% after reporting a net profit of Rs 37.48 crore for the first quarter ended June 2012 as compared to the previous corresponding period, on the back of higher sales and foreign exchange gains.

Raymond Limited dipped 4% to Rs 336 after reporting a consolidated net loss of Rs 35 crore for the June-ended quarter against a net profit of Rs 11 crore a year ago, due to higher operational costs.

The broader indices were battered more as compared to benchmarks – BSE Midcap and Smallcap indices ended down by over 2% each.

The market breadth ended dismal with 1,935 declining and 842 shares advancing in the BSE.