Sensex edges higher; Automobile stocks move up

Amid alternate bouts of buying and selling on stock specific news, the market continues to trade in positive territory with modest gains this afternoon. Though most of the markets in the Asian region ended lower today and the trend on the European bourses too remaining a bit negative, the Indian stock indices are up in positive territory with the decline in inflation and expectations of a rate cut triggering some buying.

The Sensex is up 65.79 points or 0.37% at 17,838.63, while the Nifty is up with a gain of 22.65 points or 0.42% at 5412.85.

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According to the data released by the government today, headline inflation fell to an over two-year low of 6.55% in January on cheaper food items, which may prompt the Reserve Bank to cut policy rates in the coming months. It had stood at 7.47% in December 2011 and was 9.47% in January last year. The latest numbers are the lowest since December 2009 when headline inflation was at 7.15%.

As per the official data released today, food inflation was (-) 0.52% in January against 0.74% in December. Inflation in the fuel and power segment stood at 14.21% on an annual basis in January, against 14.91% in the previous month. Meanwhile, inflation for November 2011 has been revised upwards to 9.46% from provisional estimate of 9.11%.

Among the gainers in the Sensex, Hindalco and State Bank of India are trading stronger by 3.4% and 3.2% respectively. Automobile stocks Hero Motocorp (2.5%), Maruti Suzuki (1.8%), Mahindra & Mahindra (1.8%) and Tata Motors (1.3%), engineering heavyweight Larsen & Toubro (1.5%) and realty stock DLF (1.2%) are also up with strong gains.

Sterlite Industries, ICICI Bank, Reliance Industries, Sun Pharmaceuticals, Tata Steel and Infosys are up 0.5% - 1%.

Cipla is down with a sharp loss of 5.4% following the company reporting a lower than expected net profit for the October - December quarter. Tata Power is down with a loss of around 4.5%. Siemens has lost a little over 2%.

ONGC, Bharti Airtel, Ranbaxy Laboratories, Kotak Bank, HDFC Bank, Dr Reddy's Laboratories, Jindal Steel and HCL Technologies are also down in negative territory with notable losses.

Tata Consultancy Services is consolidating its position as one of the biggest IT services providers in the Nordic region. The company has bagged a multi-year deal from Denmark's largest telecommunications firm TDC, replacing incumbent CSC. Though the exact value of the deal is not known, it is likely to be worth over $100 million. TDC is one of CSC's largest private sector clients in the region and its 2008 contract with the telecom firm was worth over $400 million. The IT stock is down marginally at Rs 1223 at present.

Nifty stock Reliance Communications has gained nearly 5% to Rs 98.50 on strong buying at the counter. IDFC is up 4.3% at Rs 139.60. Reliance Power, BPCL, Axis Bank, Cairn India, Sesa Goa, Punjab National Bank, Reliance Infrastructure and SAIL are also up with impressive gains.

Jaiprakash Associates Ltd has posted a net profit of Rs 204.95 crore for the quarter ended December 31, 2011 as compared to Rs 232.66 crore for the quarter ended December 31, 2010. Total income increased from Rs 2952.55 crore for the quarter ended December 31, 2010 to Rs 3425.86 crore for the quarter ended December 31, 2011. The stock is up 1.5% at Rs 78.90 at present.

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HDIL is up 4.5% at Rs 102. The company has posted a net profit of Rs 23.90 crore for the quarter ended December 31, 2011 as compared to Rs 251.93 crore for the quarter ended December 31, 2010. Total income decreased from Rs 483.47 crore for the quarter ended December 31, 2010 to Rs 132.26 crore for the quarter ended December 31, 2011.

On consolidated basis, the HDIL Group posted a profit after taxes, minority interest and Share of profit of associates of Rs 155.80 crore for the quarter ended December 31, 2011 as compared to Rs 228.19 crore for the quarter ended December 31, 2010. Total income decreased from Rs 475.08 crore for the quarter ended December 31, 2010 to Rs 440.32 crore for the quarter ended December 31, 2011.