Sensex sheds 137 points; IT, TECk stocks major losers

Indian stock markets fell over 0.6 per cent at the closing session on Thursday owing to weak European cues.

The BSE Sensex ended at 20,410.81, down 0.67 per cent or 136.81 points and the NSE Nifty ended at 6,039.20, down 0.82 per cent or 49.85 points.

On the BSE, most sectoral indices ended in the red led by IT, TECk and capital goods which were down by 3.62 per cent, 2.64 per cent and 2.39 per cent, respectively.

Consumer durables, oil and gas and FMCG sectors, however, supported the Sensex and rallied by 1.93 per cent, 1.29 per cent and 1.17 per cent, respectively.

Bharti Airtel, ONGC, ITC, RIL and Hero MotoCorp were the top five Sensex gainers, while the top five losers were TCS, Tata Motors, L&T, Wipro and Infosys.

Asian shares were up as the US Congress passed a bipartisan Bill which was quickly signed into law by President Barack Obama today to end a 16-day government shutdown and avert a historic debt default.

A report from India Forex Advisors said: “The deal is akin to 'kicking the can sans a long-term remedy'; it does not resolve the fundamental issues of spending and deficits that divide the Republicans and Democrats. The deal will fund the Government until January 15 and raise the debt limit through February 7, so global markets would face the possibility of another showdown in Washington early next year.“

European stocks fell from a five-year high as companies from Sulzer AG to Outotec Oyj lowered their financial targets for the full year, while a rating company downgraded the American government’s debt.

South Indian Bank posts 40% growth in NRI remittances

Kerala-headquartered South Indian Bank has registered a 40 per cent growth in NRI remittances during the first half of the current fiscal.

Briefing media persons after the board meeting here this morning, the bank Chief Executive V.A. Joseph said that the NRI remittances crossed the Rs 7,000-crore mark for the first time this year.

“Favourable rate of return on investment coupled with the depreciating rupee became a huge attraction for the NRIs to park their funds here. While this was not totally unexpected, we can’t expect the remittances to grow at the same speed in the coming quarters,’’ he told Business Line.

The bank has reported a 30.5 per cent growth in net profit for the quarter ended September 30, 2013.

“By maintaining our net interest margin at over 3 per cent and strategically managing the portfolio mix of liabilities, we managed to achieve such growth in our profits. We will strive to improve our growth momentum in the coming quarters,’’ he said.

Biz growth

Total business grew 12.67 per cent to Rs 75,610 crore from Rs 67,110 crore. Net NPAs increased to 1.39 per cent (0.86 per cent).

“This was on account of the stress in 2-3 corporate accounts and the fact that we did not grow our advances aggressively this year. The base has remained small,’’ he said.

(Advances grew 12.27 per cent from Rs 28,620 crore as at end September 2012 to Rs 32,132 crore at the end of the just-ended quarter).

Retail loans

The bank is concentrating on retail loans, which account for about 45 per cent of the total advances, Joseph said.

To a query on gold loans, he said: “It is the best form of advance as the recovery is excellent.’’

Gold loans at present account for 20 per cent of SIB’s total advances. The bank is targeting to increase it to 25 per cent by the end of the year.

Sadbhav Engineering emerges successful bidder for contract worth Rs 302.30 crores

Sadbhav Engineering has been declared as successful bidder (L1) in respect of the bids invited by Bharat Coking Coal (A subsidiary of Coal India), Dhanbad for the project/work for contract value of Rs 302.30 crores. The scope of the project includes Hiring of HEMM for removal of OB and extraction and transportation of coal from IV (B), III, II I(T) & I(B) seams of Patch-J of Dhansar Colliery of Kusunda Area. The total quantity for the removal of over burden (OB) is 265.39 LCM and extraction of coal is 70.14 LMI.

Sadbhav Engineering (SEL) is one of the largest BOT developers in the road sector in India with good project execution skills. SEL operates in the four distinct business areas in the infrastructure sector viz. BOT road projects, cash contract-based road projects, irrigation projects and mining.

NMDC's iron ore production up by 5.31% in H1 of FY14

PSU produced 12.24 million tonnes during the corresponding period last year

State-owned NMDC today said its Iron ore production for the half-year ended September 30, has gone up by 5.31% to 12.89 million tonnes.

The PSU produced 12.24 million tonnes (MT) during the corresponding period last year.

According to a filing with bourses, NMDC said that its overall ore sale has registered a growth of 8.09% during the first half of the fiscal to 13.75 MT against 12.72 MT during April-September of 2012-13.

While sale from Karnataka mine has gone up by 13.33% to 4.42 MT during the period under review, Chhattisgarh registered 5.78% growth to 9.33 MT, the miner said.

Similarly, production of ore from Karnataka has shown 9.90% growth at 4.44 MT, while the same from Chhattisgarh was at 8.45 MT registering a 3.05% growth during the first-half of last fiscal, it added.

NMDC shares were quoted at Rs 129.70 apiece on BSE at 12.40 pm.

The miner also said that its Board of Directors would meet on October 24 to announce the Un-Audited Financial Results of the Company for the quarter ended September 30, 2013 (Q2).

Markets remain flat amid rangebound trades

Markets remained flat in noon trades on Thursday as gains in oil and gas shares helped offset losses in IT majors.

Markets remained flat in noon trades on Thursday as gains in oil and gas shares helped offset losses in IT majors.

At 12:50PM, the 30-share Sensex was up 21 points at 20,568 and the 50-share Nifty was up 1 point at 6,090.

The strengthening spree of the rupee continued in afternoon trades due to dollar sale by exporters. However, month-end dollar demand is approaching, which may keep the rupee under pressure.

At 12:30pm, the rupee was trading at Rs 61.57 compared with previous close of Rs 61.85 per dollar on Tuesday.

Asian were trading mixed after US lawmakers came to an agreement to raise the government's borrowing limit and avoid a potential debt default. The Nikkei was up 0.8% and Straits Times rose 0.7%. However, Shanghai COmposite and Hang Seng were marginally down.

BSE Oil and Gas index was the top gainer among the sectoral indices up 2% followed by FMCG and COnsumer Durables among others. BSE IT and Capital Goods indices were among the top losers.

Oil and Natural Gas Corporation rallied nearly 3% on reports that the state-owned oil exploration and production firm finds rich reserves of oil in KG Basin block.

Index heavyweight Reliance Ind was up 2.4% at Rs 888.

In the FMCG space, ITC was up 1.7% and Hindustan Unilever was up 1.3%.

IT majors TCS and Infosys were down on profit taking after recent gains post encouraging Q2 earnings.

Other Sensex losers include, Tata Motors, L&T, ICICI Bank and SBI.

Among other shares, Bajaj Corp has dipped over 9% to Rs 215, extending its past two day’s fall, after reporting a lower-than-expected net profit at Rs 36 crore for the second quarter ended September 30, 2013 (Q2) due to lower sales and higher spend on advertising and sales promotions. The company had profit of Rs 38 crore in a year ago quarter.

In the broader market the mid-cap index was up 0.6% and Small-cap index up 0.3%.

Market breadth was positive with 1,158 gainers and 949 losers on the BSE

Axis Bank Q2 net up 21% at Rs 1,362 crore

Gross NPA at 1.19% vs 1.10% q-o-q

Axis Bank today posted a net profit of Rs 1,362.3 crore for the quarter ended September 30, 2013 as compared to Rs 1,123.5 crore for the quarter ended September 30, 2012, a gain of 21%.

Total income increased from Rs 8,280.3 crore for the quarter ended September 30, 2012 to Rs 9,375 crore for the quarter ended September 30, 2013.

The bank reported a gross NPA of 1.19% vs 1.10% q-o-q.

The net NPA stood at Rs 838.3 crore or 0.37% vs 0.35% q-o-q.

NII was Rs 2937 crore.

Capital adequancy ratio (basel III) was 15.85% vs 15.87% q-o-q.

The provisions stood at Rs 687.5 cr vs Rs 712.3 cr q-o-q.

IL&FS Engineering bags project worth Rs 149.68 Crores from PVVNL

IL&FS Engineering and Construction Company has received a Letter of Award (LoA) from Paschimanchal Vidyut Vitran Nigam (PVVNL) for Rural Electrification (RE) works in Bulandshahr district of Uttar Pradesh on a turnkey basis under Government of India scheme of Rajeev Gandhi Grameen Vidyutikaran Yojana (RGGVY) Phase-II. The total value of this contract is Rs 149.68 Crores, and the project completion period is 18 months. The project is funded by Rural Electrification Corporation.

The Company recently won a Rural Electrification project from Madhyanchal Vidyut Vitran Nigam (MVVNL) for RE works in Ambedkarnagar district of Uttar Pradesh. The Company is already executing RE works (Packages 12, 13, & 14) for WBSEDCL (West Bengal State Electricity Distribution Company), and for Power Grid Corporation of India in the state of Orissa.

IL&FS Engineering and Construction Company is engaged in infrastructure development, construction and project management. The company has undertaken projects in segments such as roads/ expressways/ highways, buildings and industrial structures, irrigation canals and dams and thermal and hydel power.

Apollo Tyres shines on opening first branded retail outlet in Sri Lanka

Apollo Tyres, a leading tyre major, has opened ‘Apollo Zone’ it’s first branded retail outlet in Sri Lanka. The outlet is located in the up-market area of Galle Road in Colombo, and is operated by Apollo’s Business Partners, Ideal Wheels & Tyres.  This outlet is designed to provide customers with an enhanced retail experience and a better feel of the brand and products.

Sri Lanka has become one of the fast growing exports market for the company with sales increasing by more than 50% year-on-year basis. The company forayed into Sri Lankan market in June 2011 and its branded tyres -- both passenger and commercial vehicle -- have been well received by the consumers.

Apollo Tyres, headquartered in Gurgaon, has a manufacturing presence in Asia, Europe and Africa. With revenues of over $2.34 billion, the company exports to over 100 countries.

State Bank of Hyderabad unveils two new loan schemes

State Bank of Hyderabad (SBH), in order to cash on festive season has unveiled two new loan schemes ‘Grahak Utsav’ and ‘Gen Next‘. These schemes will also give boost to the sales of consumer durables and two-wheelers. The interest rates for the schemes start at 12% per annum and would be open from October 14 till January 31, 2014.

Grahak Utsav is being offered for purchase of consumer durables, such as kitchen and home appliances, computers, water heaters and furniture while Gen Next is aimed at two-wheelers.

The bank is also offering 50% concession in processing charges subject to a maximum of Rs 500 during the campaign period. The existing home or mortgage loan customers with no over dues are also eligible for a special concession of 50 basis points on the interest rate charged.

Seamec rises on entering into contract worth $1.71 million with NPCC, Abu Dhabi

Seamec has entered into a contract with Chartered Party with NPCC, Abu Dhabi for charter hire of the company’s vessel ‘SEAMEC III’ for a period of 47 days with option for extension, effective from September 29, 2013. The aggregate contract value during the firm period is $1.71 million.

Seamec is engaged in the business of operating multi-support vessels for diving and for providing underwater/sub-sea engineering services, deep sea diving, and inspection of underwater structures, repairs and maintenance of offshore platform fire-fighting services and rescue operations.

Bank of America records net income of $2.5 billion in Q3

Bank of America earned net income of $2.5 billion in the third quarter, a sevenfold increase from $340 million in the same period last year, the bank said on Wednesday.

While the company’s bonds trading already has suffered the effects of the US government’s partial shutdown and possible default on loans, its quarterly profit grew significantly due to stern austerity measures and timely credit payments from customers.

“Our customers and clients continue to do more business with us,” said Brian Moynihan, the bank’s chief executive. “The economy and business climate will improve even more quickly as conditions normalise, and we are well positioned to benefit from that.”

The bank profited mainly from the effects of the economic recovery in the US, which allowed borrowers to make regular loan payments. In addition, Bank of America also sold all its shares in the China Construction Bank, which brought in an extra $800 million before taxes.

Austerity measures at the company also decreased costs: the bank cut 9,200 jobs during the third quarter leaving the current number of employees at 247,900.

BSE plans currency futures launch by November end

Leading bourse BSE plans to launch the currency futures platform, which will utilise new advanced trading technology, by end of November.

The country's oldest stock exchange has received approval from the Securities and Exchange Board of India ( Sebi) to start trading in currency futures.

"We are likely to start currency futures by November end," a senior official from the bourse said.

The launch of current futures platform would also mark the implementation of advanced technology for trading by the exchange.

The new technology is acquired from Germany's Deutsche Borse. It has the potential to increase BSE's trading capacity by at least about five times from present 20,000 orders per second to more than 1,00,000 orders per second, the official said.

According to the official, the technology would be utilised first for currency futures and then gradually would get implemented for other segments.

BSE would be the fourth exchange in the country to launch currency futures. National Stock Exchange (NSE), MCX-SX and United Stock Exchange (USE) are already present in this segment.

At present, rival NSE has the largest share in currency futures market, followed by MCX-SX.

A lucrative segment, current futures market is estimated to be worth tens of thousands of crores of rupees.

Meanwhile, Reserve Bank of India would look at easing restrictions on the forex futures market once stability improves in the foreign exchange market.

RBI is also in talks with Securities and Exchange Board of India (Sebi) on making the dollar-rupee OTC and futures market trades possibly on a delivery basis.

Amid global uncertainties, rupee had touched record low of 68.85 against the American dollar on August 28.

IT biggies trading in the red

Despite the resolution, however temporary it is, to the political crisis in the US, the sector expected to gain the maximum by the positive development-IT sector — is the one to react negatively as the markets opened this morning with some of the big IT players like TCS, Infosys and HCL Tech losing value in the morning trade.

Interestingly, some of these companies had come out with their Q2 results and possibly investors, who had built-up positions in these counters, were unwinding them a bit. But some of the smaller IT stocks were trading in the green, though the CNX IT was down by about 90 points.

HCL Tech, which came out with good numbers this morning, lost Rs 11.10 to trade at Rs 1,150. TCS was another surprise loser despite stellar Q2 numbers. The stock shed Rs 45.55 to trade at Rs 2,169.85.

MindTree was down by Rs 33.05 to trade at Rs 1,346 and this company also has posted good Q2 results. Tech Mahindra shed Rs 21.95 to trade at Rs 1,561.65 and Infosys lost Rs 15.70 to trade at Rs 3,339.10.

It was only Wipro among the IT majors that was in the green, up by Rs 5.55 at Rs 516.15. Some of the smaller IT stocks like KPIT, Persistent Systems and Polaris were in the positive territory.

0.3% of GDP would protect East Asia from climate change: ADB

Since 1970, economic losses to the four countries from climate-related natural disasters have amounted to more than US$340bn.

About 12 million people in 23 East Asian cities are at risk from rising sea levels, severe storms, and more intense drought caused by climate change that could jeopardize $864 billion in assets, a new report from the Asian Development Bank (ADB) warns.

Economics of Climate Change in East Asia notes that while climate adaptation investments can be large, the aggregate cost to protect the most vulnerable sectors - infrastructure, coastal protection, and agriculture - would be less than 0.3% of East Asia’s gross domestic product every year between 2010 and 2050.

“This report shows that the cost of inaction far outweighs the cost of climate change adaptation if countries act now,” said Ayumi Konishi, Director General of ADB’s East Asia Department. “Climate change not only brings challenges to East Asia, but also opportunities for stronger regional cooperation.”

The report recommends the People’s Republic of China (PRC), Japan, the Republic of Korea, and Mongolia together to invest an annual average of US$22.9bn for climate-proofing in the infrastructure sector, US$4.2bn for coastal protection, and US$9.5bn for the agriculture sector.

The report projects that severe weather related to climate change will intensify, with one-in-20-year flooding predicted to occur as frequently as every four years by 2050. When combined with rising sea levels, this is expected to cause massive swaths of land to disappear, forcing millions to migrate, and wreaking havoc on infrastructure and agriculture. Since 1970, economic losses to the four countries from climate-related natural disasters have amounted to more than US$340bn.

Rising sea levels could cause the PRC to lose an estimated 102 square kilometers of land mass per year between 2010 and 2050. Japan, meanwhile, will lose more than a quarter of its coastal wetlands by 2050. In the same time period, the Republic of Korea could lose up to a fifth of its coastal areas.

Loss of land could also force people to move. In the PRC alone, more than one million people could be displaced by rising sea levels between 2010 and 2050, with associated costs of $153 billion, while around 64,000 could be forced to move in Japan, at a cost of $7.8 billion.

East Asia is critically important to global mitigation efforts since the region – consisting of about one-quarter of the global population – is responsible for about one-third of the world’s energy-related greenhouse gas emissions.

The report examines how the PRC, Japan, Republic of Korea, and Mongolia can respond to the challenges of climate change through a combination of adaptation and mitigation. Team members came from more than 10 leading universities and think tanks in Asia, North America, and Europe, providing access to best available databanks and models on climate change.

Tata Teleservices’ arm launches business productivity solution ‘InstaSoft’

Tata Teleservices’ mobility and business services brand - Tata DOCOMO, has launched business productivity solution ‘InstaSoft’, which is Software as a Service (SaaS) based business and office productivity solution, which provides end-to-end solution to enterprises.

The InstaSoft suite has a set of solutions that include: InstaOffice- a messaging and collaboration solution. InstaHRMS - an end-to-end HR solution covering all aspects of employee’s lifecycle. It also includes InstaMeet, a one-stop interactive solution that will increase the company's overall reach and enable employees to work together by dissolving time and space differences.

Tata Teleservices Maharashtra (TTML) is a part of the Tata Group. This telecom services company has its presence all over Maharashtra and Goa.

Asian stocks give cautious welcome to US deal to raise debt cap

Asian stocks markets opened up on Thursday on news that a deal had been reached in Washington to avoid a US default.

Japanese shares rose after the US Senate voted to raise the debt limit ahead of a Thursday deadline and reopen the federal government.

As of 10:20 am (0120 GMT), the benchmark Nikkei 225 Stock Average gained 175.95 points, or 1.22 per cent, to trade at 14,643.09 while the broader-based Topix index was up 13.3 points, or 1.11 per cent, at 1,210.08.

On currency markets, the dollar traded at 98.75—78 yen, up from Wednesday’s 5 p.m quote of 98.37—39 yen.

The trend was followed in other Asian markets.

Taiwanese shares and Hong Kong’s Hang Sen index both rose by around half a per cent, up 0.54 per cent and 0.44 per cent respectively.

The Philippine Stock Exchange PSEi index rose by 1.14 per cent, while Australia’s S&P/ASX 200 index nudged upwards by 0.33 per cent.

Rupee strengthens to 61.45 Vs dollar

The rupee gained 40 paise to 61.45 per dollar in the opening trade against the previous close of 61.85 on the back of weak dollar and firm domestic equity market.

The American currency had weakened as US Senate leaders on Wednesday night announced a deal to end the 16-day prolonged US shutdown that brought the world’s biggest economy close to a debt default.

According to currency dealers, the dollar index is expected to strengthen, which will weigh on the domestic unit.

Call rates, G-Secs

The inter-bank call money rate, the rate at which banks borrow from each other to meet their short-term fund requirements, opened higher at 9.10 per cent against the previous close of 9 per cent.

The 7.16 per cent government security, which matures in 2023, opened higher at Rs 90.56 against the previous close of Rs 90.35.

The yields softened to 8.62 per cent from 8.66 per cent. Bond yields and prices move in opposite directions.

Hindalco yet to get any coal, even 8 years later

Aditya Aluminium project ready but clearances still stuck for mine

Hindalco will have to buy coal from other sources at a very high cost for its Rs 17,000-crore aluminium project in Odisha, as its Talabira mine is yet to receive Stage-II clearances from the Union environment ministry. The mine is at the centre of an investigation by the Central Bureau of Investigation (CBI) for what it claims is the government’s undue benefits to Hindalco.

The coal block was allocated to Neyvelli Lignite, Mahanadi Coal and Hindalco in 2005 but till date no work has started at the site. Neyvelli has 70 per cent share of the mine, while Mahanadi and Hindalco have 15 per cent each.

CBI has filed a First Information Report (FIR) against Aditya Birla Group Chairman Kumar Mangalam Birla and Hindalco for “influencing” the government to get the coal block allocated to the company. According to CBI, the block was first allocated only to a public sector unit in April 2005 but Hindalco received a 15 per cent share in the mine after Birla met the then coal secretary.

According to observers, unsubstantiated allegations are being made against a respected industrialist. Birla, they said, made several representations to the government as any corporation would normally make in such circumstances. They point out that the group has spent Rs 15,000 crore and provided 10,000 jobs in one of the most backward areas of the country and it is ridiculous to suggest that Birla got any undue benefits.

“All processes were followed and the mine was allotted not for trading but for a project for which huge investments has been made. It’s not Birla who decides on the mine allocation process. Why blame him now?” said an independent observer.

The first application for the Talabira-II mine was made by Indal way back in 1996. After the company was acquired by Hindalco in 2000, it was allocated the mine in November 2005. However, no production could start at the site for want of environment clearances. Observers pointed out that this in itself suggests the industrialist did not get any undue benefits. They added that this is an insult to the government itself if anybody suggests that a single company managed to overturn the decision of the screening committee set up to monitor all mining approvals.

The Aditya Birla Group made the investment decision in Odisha after it was promised low-cost coal and bauxite by the government. However, without access to a coal mine, the project cost will shoot up substantially, analysts warned.

According to observers, the only reason the coal mine was allocated to Hindalco was because the company was investing Rs 17,000 crore in an aluminium project in Odisha. In fact, the state’s chief minister, Naveen Patnaik, had intervened on behalf of the company and had written to Prime Minister Manmohan Singh to allocate the mine to the company as lots of jobs were expected to be created in the state.

In November 2005, Talabira-I and Talabira-II mines were converted into one block and Hindalco was given 15 per cent share in the mine. The amalgamation was to reduce production losses due to demarcation of boundaries between the two mines.

The CBI started investigation into the entire coal mining allotment scam after the Supreme Court asked it to file a report based on a report by the Comptroller and Auditor General of India (CAG), which pegged the government’s loss at Rs 1.8 lakh crore. The CAG had said the losses occurred as the mines were not auctioned.

Lupin applies for increase in FII holding to 49%

Currently, the FII shareholding limit in the company stands at 33%

Lupin has applied to the Reserve Bank of India (RBI) for an increase in the FII shareholding in the company. The company has asked for an increase in the foreign institutional investor (FII) shareholding limit to 49% from 33% earlier, said an exchange notification.

In a filing to the exchanges, the company said that it had applied to the RBI after the company board passed the resolution to increase FII limits at its annual general meeting.

“The company has now been informed by RBI that the request of the company is being examined,” said the filing.

As of end September quarter, the FII shareholding in the company stood at 31. 45%, up from 27.99% in the year-ago quarter.

The stock price of the company was trading at Rs 906 per share on Thursday, up 0.6% from its previous close.

The BSE Sensex was down 0.2% to trade 20,511 while the NSE Nifty was down 0.4% and was trading at 6,066.

Sensex opens on a flat note

The Sensex and Nifty opened the session marginally in the green on buying by funds and retail investors amid firm Asian cues.

At 9.15 a.m., the 30-share BSE index Sensex was up 35.12 points (0.17 per cent) at 20,582.74 and the 50-share NSE index Nifty was up 6.7 points (0.11 per cent) at 6,095.75.

Asian stocks were up , with the regional benchmark index rising towards a five-month high, after the US Congress voted to end the Government shutdown and raise the debt ceiling.

US stocks rallied, sending the Standard & Poor’s 500 Index towards a record. The benchmark index rose 1.4 per cent to 1,721.47 at 4 p.m. in New York. S&P 500 Index futures added 0.1 per cent after the gauge closed within 0.3 percent of a record in New York.

Realty stocks rise on technical factors

Realty sector stocks have been gaining for the past two weeks as these beaten down stocks are seeing a short-term pullback

Realty sector stocks have been gaining for the past two weeks, with these beaten down scrips seeing a short-term pullback. Technical analysts said some of these could prove to be good purchases, as share prices are expected to see a further rise in the next three-four months.

They named Prestige Estates, DLF, Sobha Developers and Unitech among those in for a short-term reversal in the trend and likely to go up by as much as seven per cent in the next few months.

“Some of the realty stocks had been beaten down significantly. What we are seeing now is a pullback from these levels and, going ahead, we could see higher levels in the next three-four months,” said Shubham Agarwal, vice-president and senior technical analyst, equities, Motilal Oswal Financial Services.

Others also see more gains for realty stocks. “The trend is positive and we are expecting an upside of seven-eight per cent in some of these. We’re particularly bullish on DLF,” said Ashish Chaturmohta, head, technical and derivatives analysis, Fortune Equity Brokers.

Analysts said the signalling of further cuts in the short-term borrowing rates by Reserve Bank of India had worked well for these companies. Also, market participants believe if the central bank does not increase the repo rate further in the October 29 policy review meeting, it would provide a further boost.

However, if RBI decides to raise the policy rate, it could lead to these stocks paring the gains seen recently.

Technical analysts said while some of the realty companies might not be good long-term bets, they could still provide good returns in the short term because of the pullback in share prices. Indiabulls Real Estate and DLF were among the likely ones, said analysts.

Since the beginning of October, the Indiabulls’ stock has risen 15.4 per cent and by about 14 per cent since April this year. DLF has also risen by 19 per cent since October but is down by nearly 35 per cent since April 1. The story is the same for Sobha Developers, Prestige Estates and Unitech, which have risen in the past 15 days but are down on a financial year-to-date basis.

The BSE Realty index has since April fallen by 25 per cent but has gained about 13.5 per cent in October.

The rise in broader markets (the Sensex is up six per cent in October) has also helped improve sentiment towards the realty sector. However, some analysts are not sure on the sustainability.

“The realty sector has been a constant underperformer since 2009 and could continue to be so. There will be some bouts of rally, depending on the short-term or long-term view of the market,” said Sahaj Agrawal, deputy vice-president, derivatives research, Kotak Securities.

Select stocks could outperform but broadly the sector is expected to underperform over a larger timeframe, he added.

HCL Tech Q1 net up 64% at Rs 1,416 crore

Consolidated dollar revenue for the quarter stood at $1,270 mn

HCL Technologies, India's No. 4 IT services exporter, beat market expectations with a 64% rise in September quarter profit, joining larger Indian rivals in signalling accelerated spending by clients.

Consolidated net profit for the three months ended September 30 rose to Rs 1,416 crore from Rs 864 crore in the same period a year earlier, HCL Technologies said on Thursday.

The rupee revenue stood at Rs 7,961 crore while the consolidated dollar revenue was $1,270 mn.

The company reported EBIT at Rs 1,895 crore, with the EBIT margin at 23.8%.

HCL's customers include Nokia Oyj, Xerox Corp and AstraZeneca PLC. HCL Technologies follows a July-June fiscal year.

Tata Consultancy Services, the No. 1 Indian IT services provider, on Tuesday beat profit expectations for the September quarter and said it may increase hiring.

On Friday, No 2 player Infosys increased the lower end its revenue forecast for the year ending in March and said clients were accelerating spending.

US shutdown brings some relief for Indian IT firms

There could be some cheer for domestic IT companies such as Infosys and Wipro with the much-dreaded immigration Bill unlikely to become a law because of the US Government shutdown.

With the continued standoff between the US Senate and the Congress which has kept the government offices there from working, chances of the Bill being passed by the House of Representatives are remote. Incidentally, the Senate has already passed the Bill. In case the Bill is not passed before this year-end, it is very unlikely that it will get passed next year because of the congressional elections in the US.

RUNNING OUT OF TIME

Kevin A Hassett, an US economist and a former policy consultant with the department of treasury, told Business Line in a telephonic interaction that legislators are running out of time as far as passing the Bill into an Act is concerned. “The problem is the US economy is not doing well and the Government shutdown has already added to the woes. Legislators have much less time for the immigration Bill,” Hassett said.

Rajkamal Rao, a former director with consultancy firm, PwC who deals with immigration issues, said: “Can you imagine rubber stamping the Bill during an election year. It is not even there in the House calendar.”

But Infosys CEO and Managing Director S.D. Shibulal said the company is on a “wait and watch” mode as far as immigration Bill is concerned.

The Bill has already been passed by the US Senate and needs to be passed by the House of Representatives for it to become a law. The Bill seeks to increase costs for software service exporters and restricts placement of H-1B employees in the US.

In his report on the Bill, Hassett says salary and reporting requirements have been tightened under the provisions of the Bill. Employers will be required to pay H-1B workers higher wages and advertise for the position on a special Web site set up by the Department of Labour.

Employers will also have to give priority to Americans before turning to foreign workers in their recruiting process, Hassett, who was the adviser to presidential candidate for Mitt Romney in 2012 elections, said.

Rao, who has authored a book on the immigration Bill, said in the order of priorities right now, the Bill stands last. If there is any possibility at all, then both the Senate and the House of Representatives have to agree on passing H-1B provisions separately but the President Barack Obama has repeatedly said that he is against piecemeal approach to the Bill.

“The trust between the Republicans and the Democrats has been very, very low. For them to pass the Bill in which H-1B is a part will be a pure miracle,” he said.

DISASTROUS FOR BOTH

Hassett, who served as a senior economist at the Board of Governors of the Federal Reserve System, said such provisions can be disastrous for both the US and Indian companies.

He blamed the US politicians for trying to gain leverage from trying to push for such laws. He said it is wrong to suggest that immigrants have taken away jobs from the natives.

“Immigrants not only contribute to the US economy through innovative ideas and scientific research, but also by starting new businesses and industries and creating new jobs for the natives,” he said in his report.

Gold eyes month-end Fed meet

Gold prices on domestic spot and futures market are likely to trade sideways as the focus now shifts to the US Federal Reserve meeting after US legislators reached a deal to raise the debt ceiling.

Late last night, US senators cleared the proposal to raise the ceiling limit and it is now likely to be endorsed by the House. Since this has already been factored in by the market, gold is unlikely to sway much.

The market will now begin taking bets on what the Fed Reserve will decide at its meeting during October 29-30.

Fall in gold’s value

On the other hand, Bloomberg reported that some of the best forecasters of gold see gold dropping further in the following four quarters.

At a gold industry meet in Jaipur, India, last month, experts were of the view that gold may not see much of an uptrend until 2015.

Aiding the downtrend further is the decline in holdings in gold exchange-traded funds. Holdings in world’s largest gold-exchange traded fund, SPDR Trust, fell to 885.53 tonnes.

One silver lining for gold, however, is the surge in sales of US gold coins this month. But this is attributed to the shut down and developments rest of this month could hold key on what investors really think of the precious metal.

In the domestic market, jewellers are lukewarm about festival sales, including Dhanteras when people flock to acquire gold. Activity at retails outlets is subdued and rains last week have caused some damage to standing kharif or summer crops. This could have an effect on rural buying, though a total picture will be available only early next month, when crop arrivals peak.

Spot gold, gold futures

In early Asian trade, spot gold ruled at $1,283.01 an ounce and gold futures contract maturing in December at $1,282.50.

The domestic market on Wednesday saw gold for jewellery (99.5% purity) rise to 30,605 for 10 gm and pure gold (99.9% purity) to Rs 30,775.

The domestic spot gold prices are not in sync with global prices mainly due to shortage of bullion. The yellow metal is now commanding a premium of nearly Rs 5,000 for 10 gm.

On MCX, gold for December delivery could trade within Rs 30,000.

Crude Oil

Crude oil could head north after the US lawmakers have agreed to raise the debt ceiling.

Brent crude December contracts were up at $110.86 a barrel and US crude contracts for the same month at $102.25.

Oils and oilseeds

The oils and oilseeds complex could scale higher as rains in the growing regions of US delay soyabean harvest. More importantly, the Chinese crushers seem to be buying more from the US. Recovery in soyameal demand is also helping the complex, while empty pipelines in India could also buoy sentiments.

Chicago Board of Trade soyabean contracts maturing in November rose to $12.79 a bushel in Asia. On Bursa Malaysia Derivatives Exchange, crude palm oil contracts maturing in January opened higher at 2,427 ringgit or $767 a tonne.

Grains complex

The grain complex could see prices slipping as corn (industrial maize) harvest gathers pace in the US. Wheat is witnessing profit-booking and the market factoring in all the negative developments.

CBOT corn for delivery in December quoted at $4.43 a bushel and wheat for delivery in the same month at $6.84 a bushel.