Weekly: Markets end with marginal gains

Capital Goods, Banks, Oil & Gas shares lead gains

Benchmark share indices ended the week marginally higher, shrugging off weakness in the rupee, as the government's bold decision to steeply hike petrol prices was seen as precursor to unfolding of reforms going forward.

For the week ended May 25, the 30-share Sensex gained 65 points or 0.4% to end at 16,218. The 50-share S&P CNX Nifty inched up 29 points or 0.6% to end at 4920.

Meanwhile, value buying in select mid-cap and small-cap stocks helped the broader indices outperform the benchmark indices. The BSE mid-Cap index rose 0.6% to end at 5,900 and the BSE Small-Cap index jumped 1% to end at 6,318. 

In the steepest ever increase, the government on Wednesday announced hike in petrol prices by Rs 7.54 per litre, the first hike in rates in six months. The increase was necessitated by their rising under-recoveries and a weakening rupee, the oil marketing companies said. Prior to this, the steepest hike in absolute terms as done last May, when the price rose by Rs 5.

The gains during the week were led by capital goods, banks, oil and gas shares. The BSE Capital Goods index gained 1.7%, Bankex rose 1.6% while Oil & Gas index was up 1.5%.

Capital goods majors BHEL and L&T were among the top gainers. BHEL surged 3.5% after reporting better-than-expected 21% year-on-year (y-o-y) growth in net profit at Rs 3,380 crore for the quarter ended March 2012. Analysts had forecast a net profit of Rs 3,094 crore. Net sales grew 8% at Rs 19,260 crore on y-o-y basis. Further, the state-owned engineering major won an order from NTPC for supply and installation of Electrostatic Precipitator (ESP) package for 2x660MW Solapur Supercritical Thermal Power Project.

L&T ended up 2% after the company said L&T Construction has bagged new orders valued Rs 744 crore during the first quarter of 2012-13 so far.

State Bank of India surged over 3% after India's largest lender last week reported better-than-expected net profit at Rs 4,050 crore for the fourth quarter ended March 2012, due to lower provisioning and higher other income. Analysts on average had expected net profit at Rs 3,477 crore from India’s largest lender.

The results performance by SBI helped eased worries over credit growth and non-performing assets in the banking sector. Both private sector banking majors ICICI Bank and HDFC Bank also ended marginally higher during the week under review.

In the oil & gas space, Gail (India) surged 5.9% to Rs 336.30 after the company said that has signed a natural gas sale and purchase agreement with TurkmenGaz for Turkmen gas shipped via the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline.

Exploration major ONGC was up 3.4% at Rs 257 after the government announced a steep hike in petrol prices during the week.

However, most of the auto majors witnessed profit booking on concerns that the steep hike in petrol prices would further slowdown sales growth going forward. Bajaj Auto ended down 2.4%, Hero MotoCorp slipped 1.5% while Maruti Suzuki dropped 4.1%. However, Tata Motors gained 3.6% during the week.

ITC which announced its results on Friday ended down 3.1% at Rs 232. The FMCG major announced a 20% rise in net profit, at Rs 1,614 crore for the quarter ended March 31, 2012. The company's profit in the corresponding period a year ago was Rs 1,281.48 crore. The firm's total Income was up about 18%, from Rs 6,063.38 crore for the quarter ended March 31, 2011 to Rs 7,162.51 crore for the period under review. Net sales rose 17.6% to Rs 6,861 crore.
The board of Directors has recommended a dividend of Rs. 4.50 per ordinary share of one rupee each for the financial year ended March 31, 2012.
 
Wockhardt was among the top gainers in the BSE Mid-cap index surging 14% to Rs 772. The company reported a 57% year-on-year (y-o-y) growth in operating profit at Rs 429 crore for the quarter ended March 2012. Operating margins of the pharmaceutical company improved by almost 600 basis points at 35% during the recently concluded quarter. The consolidated net sales increased 32% at Rs 1,241 crore on y-o-y basis. However, the company reported consolidated net loss of Rs 192 crore for the fourth quarter of FY12 as against profit of Rs 162 crore in the corresponding quarter of last fiscal, due to exceptional loss of Rs 450 crore during the quarter.

Vikas WSP as among the top gainers in the BSE Small-cap index surging 16% to Rs 63.60 after the company said it plans to use its own cash to more than double capacity to produce guar gum after surging demand for the product.