SOUTHWARD JOURNEY

Local equity markets have once again started their downwards journey in late afternoon session after making a pullback from red to green. Better than expected January industrial output data was unable to cheer the investors' sentiments. In the mean time ,a powerful earthquake has struck off Japan, shaking buildings in Tokyo for several minutes and forcing people out of their homes  and Japan issued its most serious tsunami warning, saying a wave as high as 6m (20ft) could strike the coast near Miyagi prefecture. This news carried the negative sentiment across the global markets. Most of the Asian markets are trading in red, while US index futures were flat. Back home, Realty, Fast Moving Consumer Goods ( FMCG), HC ,Oil and Gas and Public Sector Undertaking  (PSU)   counters were trading  in positive  while Metal , Information Technology , TECk , Auto  and Power  companies were dragging the markets down. The broader indices also lost the momentum and were trading in red; the BSE Mid cap and Small cap indices have shed 0.07% and 0.08%, respectively. The overall market breadth on BSE was in the favour of declines which outnumbered advances in the ratio of 1251:1177, while, 119 shares remained unchanged.

Bajaj Electricals is currently trading at Rs 227.05, up by 3.00 points or 1.34 %. The company is expecting 20% of growth in profit by revamping its supply chain. The company in partnership with Vector Consulting Group is using the Theory of Constraints (TOC) principles and is expected to add 10% to the company's revenue and 20% to its overall profit in next two years .Further, the company aims to improve fill rates, reduce stock outs, reduce inventories, and improve dealer and vendor Return on Investment (RoI) using TOC principle. TOC solution will help all the suppliers and channel partners substantially improve their inventory turns. The company is expecting about 60% growth in revenue in FY12 at Rs 40 crore from Rs 25 crore estimated in FY11.

Emami is currently trading at Rs 364.60, up by 2.40 points or 0.66% on the buzz that the company is assessing a potential acquisition of Henkel India's business, which is on the block. HSBC, acting on behalf of the German parent Henkel AG, has started a process to divest the Indian unit's detergents and personal care operations.It was reported that, Henkel AG had given mandate to HSBC for a potential sale of its Indian business, including a manufacturing plant in Tamil Nadu.  Some companies like Dabur and Wipro could be interested only in the personal care business, that too, only the ownership brands. Detergents accounted for half of Henkel India's turnover, which was pegged at Rs 450 crore in FY10. And the detergent sales have declined in recent quarters with the company slipping into red in the December quarter.

The BSE Sensex declined 64.42 points or 0.35% at 18,263.56. The index has touched a high of 18,368.43 and a low of 18,200.37 respectively.

The BSE Mid cap and Small cap indices have shed 0.07% and 0.08%, respectively.

The top gaining sectoral indices on the BSE were, Realty up 0.75%, Fast Moving Consumer Goods ( FMCG) up by 0.72%, HC up 0.32%,Oil and Gas up by 0.29% and Public Sector Undertaking  (PSU) was up by 0.09%.

While, Metal down by 1.15%, Information Technology down by 0.87%, TECk down by 0.84%, Auto down by 0.53% and Power down by 0.40% and were the major losers on the index.

The top gainers on the Sensex were ONGC up by 2.69%, ITC up 1.02%,Tata Power up by 0.75%, HUL up 0.51%  and  DLF 0.28%.

Sterlite Industries down by 2%,HDFC down 1.88%,BHEL down 1.72%, M&M down by 1.68%, Tata Steel down 1.67% were the top losers on the index.

The Index for Industrial Production (IIP) has shown smart recovery in the month of January, coming at better than expected 3.7% after hitting a 20-month low of 1.6% in December. Higher exports, Consumer Goods sector growth has helped the ramp up in the numbers. However, December growth has been revised to 2.5%.

As far as internals are concerned the best performers were, Consumer Goods surging to 11.3% from 0.40% (Y-o-Y), Consumer Non Durables returned to positive 6.9% from -7% in the last year, Electricity grew by 10.5% from 5.6%, all other sectors showed decline in the January 2011 compared to same month last year, Capital Goods sector showed the biggest wilt, contracting to -18.6% from 57.9%, Manufacturing declined to 3.3% from 17.9%, Mining declined to 1.6% from 15.9%, Consumer Durables declined to 23.3% from 28.2%, Basic Goods declined to 7.6% to 11.5% while Intermediate Goods declined to 7.9% from 22.2%

The high base effect has negated the growth, as the last January growth was a solid 16.8%. However the other factor is the worsening of the macroeconomic situation. Continuous surge in the crude prices is also threatening to pause the growth cycle and companies are worried about rising cost of funds and input costs.

The S&P CNX trimmed 21.95 points or 0.40% at 5,472.45.The index has touched a high of 5,472.45 and a low of 5450.60 respectively.

The top gainers of the Nifty were ONGC up by 2.59%, Ranbaxy up by 3.83%, Sun Pharmaceuticals up by 0.98%, ITC up by 0.76% and HUL up by 0.70%.

The top losers of the index were BHEL down by 2.13%, Sterlite Industries down by 2.06%, M&M down by 1.94%, TCS down by 1.89% and HDFC was down by 1.78%.

All the Asian markets with an exception of Shanghai Composite, trading higher by 0.05%, were trading in the red; Hang Seng has trimmed 0.85%, Jakarta Composite shed 0.81%, KLSE Composite shed by 1.02%, Nikkei 225 tumbled  1.72%, Straits Times lowered 1.16%, Seoul Composite declined 1.31% and Taiwan Weighted plunked  by 0.87%.