TCS shares hit new high, Wipro falls in choppy India

* Tata Consultancy jumps after strong Q2 result, outlook

* Wipro misses forecast; Biocon gains as earnings rise 20
pct
(Updates to afternoon)

By Ami Shah

MUMBAI, Oct 22 (Reuters) - Indian shares seesawed on Friday
propelled by quarterly earnings, with Tata Consultancy Services
(TCS.BO) rallying to an all-time high on robust outlook for
outsourcing and Wipro (WIPR.BO) falling after missing forecast.

Investors were circumspect as a Group of 20 meeting began
in South Korea where officials are seeking a common path on
currencies, trade and macroeconomic imbalances. [ID:nTOE69K01G]

A flood of foreign money flowing into emerging markets
chasing better returns has underpinned Indian stocks, but there
are concerns in the region about the inflows pushing local
currencies up and causing asset bubbles.

At 12:14 p.m. (0644 GMT), the 30-share BSE index .BSESN
was up 0.01 percent at 20,263.39 points, with 17 of its
components advancing.

Kunal Sukhani, manager of institutional equities at Asian
Markets Securities, said investors were rewarding good results
and punishing poor performers.

Tata Consultancy jumped as much as 5.8 percent to a record
1,040.95 rupees after the No. 1 Indian software services
company posted a near 30 percent rise in quarterly profit and
said it expected strong demand for outsourcing. [ID:nSGE69K0I1]

"We have been believers in the strength of the demand
environment and the Tier-I players ability to capture the same.
Infosys (INFY.BO) and now TCS 2QFY11 earnings reports add to
our conviction," Kotak Securities said in a note.

The brokerage raised its end-FY12 target price on TCS to
1,100 rupees from 965 rupees earlier, while retaining a buy
rating.

Wipro, the third-largest outsourcer, fell nearly 4 percent
after missed forecast with a 10 percent rise in second-quarter
profit. [ID:nSGE69L057]

Top-listed biotech firm Biocon (BION.BO) rose 1.3 percent
as its July-September net profit rose by a fifth from a year
ago. [ID:nBMA008678]

Sunder Subramaniam, senior manager of institutional sales
at Sharekhan, said he expected surging foreign fund interest to
support the market.

"It really looks like there is a tsunami of liquidity.
There is nothing to worry as such," he said, referring to a
$3.5 billion IPO by Coal India that was subscribed more than 15
times. [ID:nSGE69K0JD]

The BSE index is up 16 percent this year, thanks to foreign
fund inflows of $23.8 billion.

In the broader market, gainers led losers in a ratio of
1.3:1 on volume of 254 million shares.

The 50-share NSE index .NSEI was down 0.1 percent at
6,094.70.

Elsewhere, the MSCI's measure of Asian markets other than
Japan .MIAPJ0000PUS was up 0.3 percent, while Japan's Nikkei
.N225 rose 0.5 percent.

STOCKS ON THE MOVE

* Novartis India (NOIN.BO) rose 1.3 percent to 655.10
rupees, after the pharmaceutical and crop protection products
maker said late on Thursday quarterly net profit rose 22
percent. [ID:nWNAS9782]

* Indian Bank (INBA.BO) was up 3 percent at 310.35 rupees
as the state-run lender's July-September net profit increased
12 percent. [ID:nBMB011682]

* Bajaj Corp (BACO.BO) was down 4 percent at 681.40 rupees,
as the light hair oil producer posted a 19 fall in September
quarter net profit. [ID:nSGE69K0IT]

MAIN TOP 3 BY VOLUME

* Pipavav Shipyard (PIPA.BO) on 17.8 million shares

* Housing Development Infra (HDIL.BO) on 13.7 million
rupees

* Shree Ashtavinayak (SACV.BO) on 5.4 million shares

FACTORS TO WATCH
* For technical analysis double click on www.reutersindia.net
* Indian rupee report
[INR/]
* Indian bonds report
[IN/]
* Dollar supported as G20 meets,charts offer signposts
[FRX]
* Oil gains on stimulus hopes as G20 finance chiefs meet
[O/R]
* Dollar rises before G20; Asia tech shares up
[MKTS/GLOB]
* Shares rise, whipsawed by dollar, earnings
[.N]
* For closing rates of Indian ADRs
INADR
(Reporting by Ami Shah; Editing by Ranjit Gangadharan

REFILE-Indian shares eke out weekly gain; TCS at record

(Refiles to fix figure in para 11)

* BSE Sensex logs first weekly gain in three

* TCS hits all-time high as Q2 earnings beat street view

* Wipro falls as Sept-qtr earnings lag market estimates
(Updates to close)

By Ami Shah

MUMBAI, Oct 22 (Reuters) - Indian shares snapped a two-week
losing streak but closed Friday 0.5 percent lower on weak world
equities and as traders turned cautious on near-term outlook.

Top outsourcer Tata Consultancy Services (TCS.BO) rose as
much as 6.7 percent to a record high of 1,049.90 rupees, after
beating September-quarter earnings estimate, while rival Wipro
(WIPR.BO) shed as much as 5.4 percent as it lagged forecast.

The 30-share BSE index .BSESN shed 0.47 percent or 94.72
points to 20,165.86, with 22 of its components closing in the
red. It rose 0.2 percent on the week.

"The market may be forming an intermediate top," said
Sandip Sabharwal, CEO of portfolio management services at
brokerage Prabhudas Lilladher, who did not rule out a small
correction in near future.

"More or less, we have seen decent results. But, they are
largely turning to be a non-event for the broader market this
time, considering the sharp run up before the results."

So far this year, foreign funds have invested a net $23.8
billion in Indian equities, driving the benchmark index up 15.5
percent.

Investors shovelled in another $5.8 billion into emerging
market funds in the third week of October, with global emerging
market equity funds seeing record inflows for the second time
in three weeks, fund tracker EPFR said. [ID:nSGE69L060]

India's benchmark index has outperformed MSCI's world
equities index .MIWD00000PUS and its emerging markets index
.MSCIEF which have gained 5.4 percent and 11.4 percent
respectively.

"We continue to believe that we are entering another period
of strong growth for tier 1 Indian IT companies," Credit Suisse
said in a note.

It raised its target price on TCS to 1,175 rupees from 940
rupees and maintained an "outperform" rating.

TCS closed 5.7 percent higher after the No. 1 Indian
software services company posted a near 30-percent rise in
quarterly profit and said it expected strong demand for
outsourcing. [ID:nSGE69K0I1]. Infosys Technologies (INFY.BO)
gained 0.7 percent.

Wipro, the third-largest outsourcer, closed 4.5 percent
lower after it missed forecast with a 10-percent rise in
second-quarter profit. [ID:nSGE69L057]

Cigarette-to-hotel business ITC (ITC.BO) shed 1.8 percent,
after rising 3.7 percent in the previous session.

Top-listed biotech firm Biocon (BION.BO) closed 0.3 percent
higher as its July-September net profit rose by a fifth from a
year ago. [ID:nBMA008678]

Declining shares outnumbered advancing ones in the ratio of
1.2:1, on a heavy volume of 561 million shares.

The 50-share NSE index .NSEI dropped 0.6 percent to
6,066.05 points.

Elsewhere, the FTSEurofirst 300 .FTEU3 was down 0.4
percent by 1023 GMT, while the MSCI's measure of Asian markets
other than Japan .MIAPJ0000PUS was barely changed.

STOCKS THAT MOVED

* Novartis India (NOIN.BO) rose 2.9 percent to 665.20
rupees, after the pharmaceutical and crop protection products
maker said late Thursday quarterly net profit rose 22
percent.[ID:nWNAS9782]

* Indian Bank (INBA.BO) gained 0.5 percent to 302.80
rupees as the state-run lender's July-September net profit
increased 12 percent. [ID:nBMB011682]

* Bajaj Corp (BACO.BO) dropped 4.2 percent to 680.05
rupees, as the light hair oil maker posted a 19 percent fall in
as the light hair oil maker posted a 19 percent fall in
September-quarter net profit. [ID:nSGE69K0IT]

* Geometric (GEOM.BO) climbed 1.8 percent to 69.55 rupees,
as the company, which provides products, software and
engineering services, posted a 35-percent jump in quarterly net
profit boosted by higher engineering services revenue.
[ID:nSGE69L09C]

MAIN TOP 3 BY VOLUME

* Pipavav Shipyard (PIPA.BO) on 38.3 million shares

* Shree Ashtavinayak (SACV.BO) on 18.9 million shares

* Housing Development Infra (HDIL.BO) on 15.9 million
rupees

FACTORS TO WATCH
* For technical analysis double click on www.reutersindia.net
* Indian rupee report
[INR/]
* Indian bonds report
[IN/]
* Dlr pares losses, Geithner calls for rebalancing
[FRX]
* Oil gains as weak U.S. data raises stimulus hopes
[O/R]
* Dollar slides before G20, gold and oil rise
[MKTS/GLOB]
* Shares rise, whipsawed by dollar, earnings
[.N]
* For closing rates of Indian ADRs
INADR
(Editing by Malini Menon)

Indian shares rise 0.6 pct on firm Asia

Oct 25 (Reuters) - Indian shares rose 0.6 percent in early trade on Monday, with Reliance Industries (RELI.BO) leading the rise, taking cues from strong Asian markets.

At 9:16 a.m. (0346 GMT), the 30-share BSE index .BSESN was up 0.6 percent at 20,285.88 points, with 29 components advancing.

The 50-share NSE index .NSEI was up 0.7 percent at 6,107.40. (Reporting by Ami Shah)

Indian shares extend rise to 1 pct on day

Oct 25 (Reuters) - Indian shares extended gains to 1 percent in early trade on Monday, with Reliance Industries (RELI.BO) leading the rise, tracking firm Asian markets.

At 9:59 a.m. (0429 GMT), the 30-share BSE index .BSESN was up 1.06 percent at 20,379.46 points, with 27 components advancing.

The 50-share NSE index .NSEI was up 1.3 percent at 6,142.20. (Reporting by Ami Shah)

Indian shares rise 1.3 pct; Reliance up, Wipro falls

* BSE Sensex up on strong Asia, robust foreign fund inflow

* Reliance Industries at more than 6-month high

* Wipro falls on Credit Suisse downgrade to neutral
(Updates to mid-morning)

MUMBAI, Oct 25 (Reuters) - Indian shares on Monday were
trading 1.3 percent higher on strong foreign fund inflows and
firm Asian peers, with energy giant Reliance Industries
(RELI.BO) leading the charge.

Shares in Wipro (WIPR.BO), the country's third-largest
outsourcer, bucked the trend and fell as much as nearly 3
percent after Credit Suisse downgraded the stock to neutral
from outperform. [ID:nBMA008687]

"We were pretty surprised by the weak revenues, as peers
have been rather bullish," Credit Suisse said in a note.

At 11:38 a.m. (0608 GMT), the 30-share BSE index .BSESN
was up 1.31percent at 20,428.95 points, with 29 of its
components advancing.

"The good subscription to the Coal India IPO (initial
public offering) has shown a lot of confidence in the strength
of the market. The refund money will start coming in this week
too," said R.K. Gupta, managing director of Taurus Mutual Fund.

Coal India's $3.5 billion IPO, the country's largest, was
more than 15 times covered by close last Thursday, giving the
government power to price at the top end of 225-245 rupees
range and building momentum for other state offers.
[ID:nSGE69K0JD]

The world's largest coal miner would begin to refund excess
subscriptions for the IPO, which had an institutional order
book of about $27 billion powered by foreign funds, by late
October or early November.

"Barring a few exceptions, (corporate) earnings have
largely been good," said Gupta.

The benchmark index is up 17 percent so far this year, as
foreign funds have pumped in nearly $24 billion in Indian
stocks.

Reliance Industries, which has the highest weight on the
Sensex, rose as much as 1.8 percent to 1,101 rupees, its
highest level in more than six months.

The stock, has lagged the broader market rally for the year
to date, and is up only 0.9 percent in 2010.

Tata Motors (TAMO.BO) raced 2.1 percent after the Wall
Street Journal reported the vehicle maker's Jaguar Land Rover
is in talks with a Chinese automaker to establish a
manufacturing and sales joint venture in China. [ID:nSGE69N03K]

Dr Reddy's Laboratories Ltd (REDY.BO) was up 1.5 percent
after the No. 2 drugmaker by sales reported on Saturday a 32-
percent jump in quarterly net profit, topping estimates.
[ID:nSGE69L0KW]

Hindustan Unilever (HLL.BO), the country's largest
household products and consumer goods maker was trading 1.8
percent higher ahead of its September-quarter results.

In the broader market, gainers were more than twice the
number of loser on a volume of 187 million shares.

The 50-share NSE index .NSEI was up 1.3 percent at
6,144.80 points.

Elsewhere, the MSCI's measure of Asian markets other than
Japan .MIAPJ0000PUS was up 1.8 percent, while Japan's Nikkei
.N225 shed 0.3 percent.

STOCKS ON THE MOVE

* Piramal Healthcare (PIRA.BO) was down 4.4 percent at
492.75 rupees after the drugmaker said last week it planned to
buy back up to 20 percent equity at 600 rupees a share.
[ID:nSGE69L0I5]

* OnMobile Global (ONMO.BO) was up 1.7 percent at 375
rupees as the mobile content provider said its July-September
net profit more than doubled. [ID:nSGE69O04L]

* Mahindra & Mahindra Financial Services (MMFS.BO) was up
6.5 percent to 697 rupees after the financial services provider
reported a strong quarter driven by robust disbursements and
containing interest cost. [ID:nSGE69L0K2]

MAIN TOP 3 BY VOLUME

* Ballarpur Industries (BILT.BO) on 5 million shares

* Pipavav Shipyard (PIPA.BO) on 2.8 million shares

* K.S. Oils (KSOI.BO) on 2.2 million shares

FACTORS TO WATCH
* For technical analysis double click on www.reutersindia.net
* Indian rupee report
[INR/]
* Indian bonds report
[IN/]
* Dollar resumes drop after G20, eyes on Fed
[FRX]
* Oil tops $82 ahead of Bernanke speech as dollar
weakens[O/R]
* Dollar falls, commodities jump after G20 steps
[MKTS/GLOB]
* Wall St posts third straight weekly gain
[.N]
* For closing rates of Indian ADRs
INADR
(Reporting by Ami Shah; editing by Malini Menon)

Indian rupee gains on dollar fall; shares boost

* Hopes for foreign inflows strong; share gains boost

* Dlr's broad losses versus major currencies also aids rupee

* INR seen touching 45/dlr this wk due to Coal India outflows

(Updates to close)

By Swati Bhat

MUMBAI, Oct 25 (Reuters) - The Indian rupee rose on Monday, pulling back from its biggest fall in a month-and-half in the previous session as gains in domestic shares fuelled hopes for more inflows while a weak dollar also helped sentiment.

The partially convertible rupee INR=IN closed at 44.35/36 per dollar, half a percent stronger than 44.59/60 at close on Friday when it dropped 0.65 percent, in its biggest one-day fall since early September.

"The dollar-rupee is bouncing end-to-end from sell zone of 44.55-44.65 and buy zone of 44.25-44.35," said J. Moses Harding, head of global markets at IndusInd Bank in Mumbai.

"Two factors are dominating now - general dollar weakness ahead of quantitative easing 2 and Coal India IPO outflows in the first week of November. These two forces are good enough to keep the rupee in a tight range within 44.25-44.65".

The dollar dropped broadly on Monday, hitting a 15-year low versus the yen, as a Group of 20 agreement to shun competitive currency devaluations was taken as a green light to resume dollar-selling by investors. [USD/]

The index of the dollar .DXY against six major currencies was down 0.8 percent when the rupee market closed.

"The euro was mainly being watched. Oil bids were there but there was also counter selling pressure from the currency futures market," said Abhijit Ray, a foreign exchange dealer with state-run Allahabad Bank in Mumbai.

Oil CLc1 is India's biggest import and refiners are the largest buyers of dollars in the domestic currency market with their demand tending to peak at the end of each month when they are required to make payments.

"When Coal India outflows happen, its possible for the rupee to drop to 45," Allahabad Bank's Ray said.

Coal India's $3.5 billion IPO, the country's largest, was more than 15 times subscribed last week, giving the government power to price the issue at the top of its range and building momentum for other state offers. [ID:nSGE69K0JD]

The world's largest coal miner would begin to refund excess subscriptions for the IPO, which had an institutional order book of about $27 billion powered by foreign funds, by late October or early November and most traders expect the rupee to weaken towards 45 at that time.

Indian shares provisionally close up 0.7 pct

Oct 25 (Reuters) - Indian shares provisionally closed 0.7 percent higher on Monday, led by gains in financials, with firm world equities supporting the sentiment.

The 30-share BSE index .BSESN provisionally ended up 141.23 points at 20,307.09, with 22 components gaining.

The 50-share NSE index .NSEI provisionally closed up 0.7 percent at 6,109.45 points.

(Reporting by Ami Shah; editing by Malini Menon)

Is there any correlation between Sensex and Indian’s GDP growth?

The Sensex is often not in sync with the real economy. The movements in the benchmark index of the domestic capital markets have often been completely opposite to the happenings in the economy and those of the critical economic indicators.

History speaks for itself…

	94-95	95-96	96-97	97-98	98-99	99-00	00-01	01-02	02-03	03-04
Nominal GDP growth	17.4%	17.0%	15.9%	11.8%	15.0%	10.2%	8.0%	9.9%	7.8%	11.7%
Real GDP growth	7.3%	7.3%	7.8%	4.8%	6.5%	6.1%	4.4%	5.8%	4.0%	8.5%
BSE Sensex*	13.7%	3.3%	0.2%	15.8%	3.9%	33.7%	27.9%	3.7%	12.1%	83.4%
BSE-100	12.2%	3.5%	5.5%	15.9%	2.7%	75.8%	41.7%	1.4%	12.5%	97.6%
BSE-200	NA	6.3%	4.9%	14.9%	0.8%	63.9%	41.1%	7.4%	8.9%	104.3%

Why if sensex falls there is news in the markets Indian economy not performing well?

Sensex is not a relevant index it is a quite narrow index just 30 companies cannot rule our Indian economy.

Sensex slips below 9000

Sensex slips below 9000 for 1st time since June 14, 2006

Source : moneycontrol.com

The market shattered after the RBI credit pollcy announcement. The Sensex has broken 9000 mark for the first times since June 14, 2006 and the Nifty also slipped below 2700. Metal, banking, realty, power, oil and auto stocks are extremely under pressure.

The Reserve Bank of India has announced the credit policy. It has kept all key rates unchanged. The GDP growth forecast has lowered to 7.5-7.8% as against 8% earlier. Inflation target remained unchanged at 7% by March end. The credit growth stood at 29% currently but the RBI has kept target of 20%.

Mkts @ 11:08 am : Nifty tests 2800; metal, realty, power, auto stocks plunge

The market is reeling extremely under pressure. The BSE Sensex is trading below 9500 mark and the Nifty has tested 2800 level. Asian markets have plunged further, down 3-9%, which is putting presure on our markets.

The selling is seen in metal, realty, power, pharma, auto, oil & gas and midcap stocks. Not a single stock is in the green in both indices.

The Reserve bank of India (RBI) has kept repo rate and SLR unchaged.

At 11:08 am, the Sensex slipped 347 points to 9,424 and the Nifty fell 124 points to 2,818. The BSE Midcap and Small Cap indices lost over 2-3%.

The market breadth is extremely weak; about 721 shares have advanced while 2255 shares have declined. Nearly 214 shares are unchanged.

Among the frontliners, Suzlon Energy, Hindalco, NALCO, Unitech and Sterlite Industries fell 10-19%. Power Grid Corp, M&M, Ranbaxy Labs, HDFC and Tata Motors lost 7-9%.

BSE Metal Index fell over 7%. Healthcare, Auto, Realty, Power, Capital Goods, Oil and TECK indices lost 3-5%.

Markets @ 10:24 am : Sensex below 9500; Hindalco, Sterlite, Bharti top losers

The market has extended losses further on account of huge selling in metal, realty, auto, pharma and banking stocks. Asian markets are extremely under pressure. Midcap and small cap stocks are also down.

The Sensex tumbled 320 points to 9,451 and the Nifty lost 115 points to 2,828, at 10:24 am. The BSE Midcap Index fell 2% to 3,311 and the Small Cap Index lost 1.23% to 3,917.

After months of the financial crisis gripping the developed countries, the fear is now spreading to emerging markets. Countries in Eastern Europe as well as Pakistan are reeling under the possibility of sovereign defaults. Bhanu Baweja, Head - Global Emerging Market Research of UBS feels our capital markets are globalised, and even economy to a very large extent is more globalised today, than it was ten years back. Thus emerging markets will come down with the global economy, just as they went up with it.

Market breadth is very weak; about 835 shares have advanced while 2136 shares declined. Nearly 219 shares are unchanged.

Among the fronliners, Suzlon Energy fell 19.26%. NALCO, Hindalco, Unitech and Sterlite Industries lost 10-16%. Power Grid Corp, Idea Cellular, Bharti Airtel, HDFC Bank, Tata Motors and Tata Steel plunged 5-9%. Not a single stock is in the green on the Sensex and the Nifty.

The BSE Metal Index slipped nearly 7%. Realty Index plunged 5%. Healthcare, Auto, Bankex, Power, Oil & Gas and TECK fell 3-4%.

Markets @ 10:04 am : Mkts plunge on weak Asian cues; Sensex tests 9500

The market has been continued to trade sharply lower and has opened with sharp cut in the early trade. This fall is due to the weak trend in the Asian markets. Selling is seen metal, realty, banking, telecom, capital goods, oil and auto stocks.

At 10:04 am, the Sensex fell 216 points to 9,555 and the Nifty tumbled 74 points to 2,868. The BSE Midcap index lost 1.4% to 3,332.

ONGC, Bharti Airtel, Reliance Industries, SBI, HDFC Bank, Power, Grid Corp, DLF, TCS, NTPC, HDFC Bank, ICICI Bank, Reliance Communication and Infosys are major contributors to this fall.

Tata Steel fell another 6%, as the S&P has downgraded its UK outlook to stable from positive.

Glenmark Pharma tumbled over 12%. Glenmark and Eli Lily suspended Osteoarthritis Molecule development.

Asian markets are trading sharply lower. Nikkei, Kospi, Straits Times, Hang Seng and Jakarta tumbled 5-9%. Taiwan and Shanghai lost 3% and 0.68%, respectively.

After three attempts at a rally the Dow finally managed to eke out 2% gains in late trade.The Nasdaq though shed 11 points as some of the biggest names on the index were pummeled by a weak outlook for the consumer. The S&P 500 meanwhile closed with gains of a percent and a half. The Dow advanced 172.04 points, or 2.02%, to 8,691.25. The S&P 500 index gained 11.33 points, or 1.26%, to 908.11, and the Nasdaq slipped 11.84 points, or 0.73%, to 1,603.91.

Market cues:

FIIs net sell USD 67.7 million in equity

MFs net buy Rs 17.5 crore in equity

RBI monetary policy today, street expects SLR cut

SEBI didn’t issue directive to FIIs to unwind existing positions: Sources

SEBI doesn’t want fresh positions, still collating data: Sources

Finmin sources say FIIs must unwind positions taken after Oct 20

F&O cues:

NSE F&O Open Int down by Rs 1618 crore at Rs 69806 crore

Futures Open Int down by Rs 3259 crore, Options Open Int up by Rs 1641 crore

Stock futures shed 40 lakh shares in Open Int

Nifty Oct at 9-point discount, Nov at 5-point discount

Nifty futures net add 3 lakh shares in Open Int, rollover at 37%

Nifty Open Int PCR at 0.71 vs 0.73

Nifty Puts add 1.3 lakh, Calls add 24 lakh shares in Open Int

Nifty 2900 Put adds 4.5 lakh shares in Open Int

Nifty 3200 Put sheds 1.7 lakh shares in Open Int

Nifty 2900 Call adds 9.4 lakh shares in Open Int

Nifty 3000 Call adds 7.2 lakh shares in Open Int

Reliance Q1 net up 13 pct, meets forecast

MUMBAI (Reuters) - Reliance Industries Ltd, India’s biggest company, met forecasts with a 13 percent rise in quarterly profit, but analysts were disappointed after four quarters of 20 percent-plus earnings growth.

The petrochemicals and refinery giant, valued at $77 billion, said strong refining margins helped overshadow sluggish growth at its petrochemicals business, and analysts expect a new refinery and gas output to boost earnings in the coming quarters.

It is expected to begin producing gas from its deep-sea fields off India’s east coast by September.

A 580,000 barrels-per-day refinery, being built by unit Reliance Petroleum in western India was 94 percent complete, the company said this week, and analysts expect the project could also start operations in the September quarter.

Reliance Industries, India’s top petrochemicals maker, already runs the country’s biggest refinery, a 660,000 barrels-per-day unit at the same location, and the new refinery will make the combined facility the biggest in the world.

“We will play major role in India’s energy security as we are focusing to be among the top leaders in the world in the oil and gas sphere,” Chairman Mukesh Ambani said in a statement.

Reliance said net profit rose to 41.1 billion rupees ($976 million) in its fiscal first quarter ended June 30 from 36.3 billion reported a year earlier, helped by refining margins.

Net sales grew to 430.5 billion rupees from 312.9 billion.

Analysts had forecast a net profit of 41.4 billion rupees on net sales of 418.7 billion in a Reuters poll.

Reliance said gross refining margins were $15.7 a barrel, well above the benchmark Asian Dubai crack margin, which averaged about $8 a barrel in the June quarter. The margins, which were $15.4 a year earlier, are bolstered by the refinery’s ability to process cheaper, high-sulphur crude oil.

“The numbers are just not up to the mark. The refining margins were particularly disappointing. We were expecting in excess of $16,” V.K. Sharma, head of research at Anagram Stock Broking said.

“The stock is not going to react positively tomorrow. The market is no more generous.”

Ahead of the news, shares in Reliance rose 1.8 percent to 2,306.55 rupees in a market that fell 1.1 percent.

Sluggish margins in petrochemicals clipped the pace of earnings growth for Reliance. Raw material consumption costs rose 75 percent in the quarter to 335.3 billion rupees due to higher price of crude and naptha, a key input for petrochemicals.

Exports more than doubled to 283.6 billion rupees, with fuel contributing most, the company said.

The company said its capital expenditure in the quarter was 72.15 billion rupees, primarily in the oil and gas business. It plans to add six more rigs by year-end to its fleet of six for development and exploration.

Shares in Reliance dropped 7.6 percent in the June quarter, outperforming a 10 percent fall in the sector index and a 14 percent decline in the broader market index.

What Stock Market Performance doesn't often tell You

In 2009, when the stock market began to recover and show a certain amount of steady purpose everyone finally heaved a sigh of relief. But after Enron, Lehman Brothers and all those companies that seem better at cooking their books than actually doing anything productive, are you really sure that the company you have invested in is doing as well they say it is? It's just that at a time like this when the economy seems to be on the rebound, and the managers don't really have an excuse to give their shareholders for why their companies aren't doing so well, there is a real temptation for everyone to begin a nice rewarding journey down the path of alternative reality. Serious investors don't just take the company's word for it, or even the word of the company's stock market performance. They look closely at the company's books, to see how the company really claims to be profitable.

In fact, looking past even the balance sheet, and turning into real professional investigative analyst is what it takes these days to run a successful mutual fund or any brokerage firm. For instance, you're not supposed to just look at what a company's earnings are. What would you do with the company's "earnings"? They show cash items as well as non-cash items. If you just look at the earnings, the company can pull quite a bit of trickery there. For instance, the company is allowed to show as "expenses" each year a certain percentage of all the assets it owns. If the company spends $10 million this year on an office building, and it expects to use the building for the next ten years, they can write off $1 million each year as depreciation. This would come out of the earnings it made. If a company wanted to artificially dress up its earnings, it could just not care to take that million out. You need to be able to judge exactly what a company's earnings are, to be able to understand that the stock market performance in context.

To catch them at this one, you'll need to go back and study their accounts, to see how much they invested in assets, and how much they have been writing off every year. This way, you can actually find out which companies are the most responsible. Simple stock market performance doesn't really tell you enough anymore. An irresponsible company that holds to shortsighted policies may actually show better profits for a few years in a row than another more responsible rival. Home Depot for instance for long has been particularly responsible, even at the expense of short-term popularity in stock market performance. What you need to really look at is how much the company generates at the till - in cash flow. Once there is a lot of cash coming in, you can be pretty confident the company is doing well. Earnings don't really tell you that much.

Take an airline stock for instance. They have to spend a great deal on new airplanes, maintenance, operations. A popular airline for instance, spends about two dollars for each share it has out, while it earns only maybe two cents a share. The earnings are not attractive at all, because the airline has been spending money on its future. But then if you look at all the money it makes in ticket sales, it's pretty impressive. If you look at a railway company, like Union Pacific Railway, for every share they have out, they invest about four dollars in locomotives and such. But they only report about two dollars as depreciation. And they keep doing this every year. With so little depreciation for so much expense, they certainly have a way of looking better than they are in stock market performance. This is the way then to gauge the company's worth when you invest. Just looking at how well they do in the stock market will no longer do.