Nifty ends July series at 7721, Sensex falls 1%; banks dive

31 Jul 2014

03:45 pm World markets: Doubts about the health of Europe's economy dominated trade on its major stock markets on Thursday after a cautious message from the US Federal Reserve did little to stem the dollar's charge to 10-month highs.

A steady rise for the US currency is the central story for global financial markets so far this month and a jump in U.S. economic growth reported on Wednesday extended the dollar's gains against the euro to 6 cents since early May.

US growth of 4 percent in annualised terms in the second quarter came at a time when poor company results and concerns over a still escalating situation in Ukraine have added to worries that Europe will take far longer to recover.

Euro zone inflation numbers are expected to add to those doubts, and the pan-European FTSEurofirst 300 index was 0.2 percent lower in a choppy opening.

03:34 pm Market closing: The Nifty ended July series F&O at 7721.30, down 70.10 points or 0.90 percent at 7721.30. The Sensex fell 192.45 points or 0.7 percent at 25894.97.
About 1431 shares advanced, 1488 shares declined, and 122 shares were unchanged.

Banks were hurt most in today's trade. Bank Nifty dragged over 1 percent. HDFC twins, SBI, ICICI Bank and Axis Bank were top losers in the finacial counter. Among the losers in the Sensex were NTPC, M&M and Tata Power.

Cipla, Tata Steel,  GAIL, Coal India and Bajaj Auto were on buyers list today.

03:20 pm Earnings: Mumbai-based Hindustan Construction Company (HCC) has reported a 41.1 percent year-on-year growth in net profit at Rs 27.1 crore in the quarter ended June 2014 driven by strong operational performance.

"This is the fifth quarter in a row when company has shown positive results thereby establishing that its strategy of efficient project management, cost control and focus on claim management is yielding results consistently," the company reasoned.

However, total income from operations of the company declined 9.2 percent to Rs 1,043.5 crore during April-June quarter of FY15 compared to Rs 1,149.6 crore in the year-ago period while total expenses fell 15.8 percent on yearly basis to Rs 823.9 crore in the quarter gone by.

03:10 pm Result: Maruti Suzuki, the biggest car maker in India, reported a 20.6 percent year-on-year growth (higher than analysts' forecast) in net profit at Rs 762 crore in April-June quarter of current finacial year led by volume growth and higher other income.

"The company's cost reduction and localisation initiatives, growth in volumes and favourable foreign exchange helped improve the bottomline during the quarter," said the company in its filing.

According to CNBC-TV18 poll estimates, analysts had expected the company to report net profit of Rs 730 crore on revenue of Rs 11,350 crore for the quarter.

Revenue grew by 11 percent to Rs 11,369 crore in the quarter ended June 2014 compared to Rs 10,237 crore in corresponding quarter of last fiscal supported by sales volumes growth of 12.6 percent.

Just as the market prepares to close trade for the July F&O series, cautious investors are busy booking profit. The Sensex is down 166.14 points or 0.64 percent at 25921.28, and the Nifty slips 67.85 points or 0.87 percent at 7723.55. About 1399 shares have advanced, 1440 shares declined, and 117 shares are unchanged.

NTPC falls 3 percent followed by Axis Bank, HDFC, Wipro and HUL. Among the gainers are Tata Steel, Cipla, GAIL, Coal India and Infosys.

Rupee is in a tight range on dollar purchases by state-owned banks and the dollar's broad strength globally. Value-buying after heavy selling on Wednesday keeps prices supported.

Meanwhile, the United States raised a row over a worldwide trade reform measure during Secretary of State John Kerry's talks with India's finance minister, but there was no sign of a breakthrough, a source said, reports Reuters.

Kerry, accompanied by Commerce Secretary Penny Pritzker, met Arun Jaitley as part of a strategic dialogue that has been overshadowed by New Delhi's refusal to sign a trade facilitation deal pending progress on a parallel pact on the stockpiling of food subsidies.

"WTO issue did come up in the meeting, the U.S. side mentioned it. Jaitley, however, conveyed India's position," said the source, who attended the meeting.

2:00 pm Market outlook: Investors would be better off betting on sectors related to the health of the economy, feels Hiren Ved of Alchemy Capital Management. Financial services, auto, auto ancillaries and cement are the sectors Ved is bullish on.

In an interview to CNBC-TV18, he says earnings growth of cyclical companies will outperform those of IT companies. Stocks he is bullish on include L&T and Crompton Greaves. He says there is lot of interest in L&T, but the stock could consolidate for a while.Ved sees money shifting from fixed income to equities, and expects moderation in inflation and rate cuts as key triggers for a re-rating of the stock market.

1:50 pm Result: India's largest private sector lender ICICI Bank beat street expectations with first quarter (April-June) net profit rising 16.75 percent at Rs 2,655.30 crore compared to Rs 2,274.21 crore in the year-ago period driven by higher other income and net interest income.

According to CNBC-TV18 poll estimates, analysts had expected the bank to report net profit of Rs 2,573 crore and net interest income of Rs 4,450 crore for the quarter.

Net interest income, the difference between interest earned and interest expended, grew 17.55 percent on yearly basis to Rs 4,491 crore and other income (non-interest income) grew 14.7 percent year-on-year to Rs 2,849.81 crore in the quarter ended June 2014.

1:40 pm Big knock: Shares of Gulf Oil Corporation has tanked 16 percent intraday after its demerged lubricant business is listed on the bourses today as Gulf Oil Lubricants India. The parent company now comprises only real estate, mining and explosives businesses. The new listed entity will manage standalone lubricant business in India under the 'Gulf Oil' brand. The management says the de-merger aims to unlock value of the lubricant business, that has reached a size and scale to take up its future growth journey in a focused manner independently.

The company is expecting double-digit topline growth, both in FY15 and FY16. Speaking to CNBC-TV18, Sanjay Hinduja, Chairman of the company said the new business entity will focus more on B2B tractor and other major original equipment (OE) tie-up is expected to be announced in next two weeks.

1:30 pm Buzzing: Shares of IRB Infrastructure Developers soared 7 percent intraday ridding on its April-June quarter earnings. Analysts are also bullish on the stock as it sits on an impressive portfolio.

Macquarie has an outperform rating on the stock with an upgraded target of Rs 295 from Rs 241 on increased valuation of construction business on higher visibility of orders. The brokerage expects toll revenue to grow at a 38 percent CAGR and estimates an annual cash flow boost of Rs 320 croe in the next from Ahmedabad and Tumkur projects in next two years. It is also hopeful that there is higher visibility of future projects with government target of 8500kms in FY15 including 3000kms in BOT and hence IRB Infra may see road awards of 300-400km in the next four years.

1:20 pm Monetary policy poll: The Reserve Bank of India (RBI) is likely to leave its key interest rate unchanged on August 5 and won't ease policy until early next year on fears food inflation will spike if monsoon rains are below average, according to a Reuters poll. Nearly all the 43 economists surveyed over the past week expect the RBI to leave its key repo rate on hold at 8 percent.

Median forecasts show the rate staying unchanged until the end of this year, before being cut to 7.75 percent in the first quarter of 2015. Between now and mid-2016, the RBI is expected to cut rates by 75 basis points.

The market is just refusing to budge as investors turned cautious ahead of the July F&O series expiry. The Sensex is down 22.93 points at 26064.49 and the Nifty is down 13.55 points at 7777.85. About 1410 shares have advanced, 1203 shares declined, and 106 shares are unchanged.

Cipla is up 3 percent, followed by Tata Steel, Reliance, Coal India and GAIL. Hindalco, Wipro, M&M, Dr Reddy's Labs and Sun Pharma are among the laggards.

Finance Minister Arun Jaitley is meeting with CEOs of public sector banks and other financial institutions. The focus will be on a comprehensive financial inclusion plan that will be rolled out from August 15. However, the bankers feel that the government's inclusion programme has dangers of duplication and higher loan defaults.

12:55pm Aban Offshore on buyers' radar
Aban Offshore, which provides offshore drilling services to oil companies, reported a 105 percent growth in consolidated net profit at Rs 153 crore in the quarter ended June 2014 compared to Rs Rs 74.7 crore in the year-ago period, beating street forecast of Rs 110 crore.

Consolidated total income from operations of the company grew 15.8 percent year-on-year to Rs 1,028 crore from Rs 888 crore, which was lower than analysts' expectations of Rs 1,070 crore.

Operating profit (EBITDA) jumped 25 percent on yearly basis to Rs 598 crore and margin expanded by 420 basis points to 58.2 percent in the quarter gone by. Analysts had expected both at Rs 605 crore and 56.5 percent, respectively. The stock gained 6 percent.

12:40pm RBI leave policy rates unchanged?
The Reserve Bank of India (RBI) is likely to leave its key interest rate unchanged on August 5 and won't ease policy until early next year on fears food inflation will spike if monsoon rains are below average, according to a Reuters poll.

Nearly all the 43 economists surveyed over the past week expect the RBI to leave its key repo rate on hold at 8 percent.

Median forecasts show the rate staying unchanged until the end of this year, before being cut to 7.75 percent in the first quarter of 2015. Between now and mid-2016, the RBI is expected to cut rates by 75 basis points.

12:30pm Gulf Oil interview
The Hinduja Group-owned Gulf Oil Corporation demerged its lubricants business to Gulf Oil Lubricants India Ltd and listed the latter as a separate entity on both domestic stock exchanges under the 'Gulf Oil' brand.

Sanjay Hinduja, Chairman of Gulf Oil Lubricants India is confident of the company's profit before tax (PBT) to grow significantly and touch Rs 140 crore in the coming fiscal itself.

In addition, EBIDTA margin is anticipated to improve substantially coupled with a double-digit topline growth, he says in an interview with CNBC-TV18 adding that Gulf Oil's return on equity (RoE) will advance to 30-35 percent.

12:20pm Talwalkars in demand
Talwalkars Better value Fitness surged 9 percent as media report suggested that British Health Group David Lloyd is purchasing around 15-20 percent stake in company.

The deal is expected to rake up nearly Rs 500 crore and the company is likely to consider move at board meeting on August 7, report says.

12:10pm Market Expert
Independent market expert Ambareesh Baliga said from here on, he still doesn't see a major move up, whereas it is very much possible that people could get tired and start offloading over the next couple of weeks, if not in the next two-three months. "So I see markets at lower levels than possibly closer to 7900-8000. In fact, I see levels of closer to 7400-7500 and not 8000," he added.

12:00pm The market continued to consolidate in noon trade with the Sensex rising 15.51 points to 26102.93 and the Nifty falling 5 points to 7786.40 on July expiry day and after Federal Reserve cut fiscal stimulus by another USD 10 billion to USD 25 billion yesterday.

The broader markets beat benchmarks with the BSE Midcap and Smallcap indices advancing 0.6 percent each. Advancers outnumbered decliners on the Bombay Stock Exchange by a ratio of 1407 to 1028 on the BSE.

Steel and mining stocks gained strength with the Tata Steel, Sesa Sterlite and Coal India rising 1-3 percent while oil & gas stocks like Reliance Industries and GAIL gained 1 percent each.

India's largest private sector lender ICICI Bank and top car maker Maruti Suzuki climbed 0.5-1 percent ahead of first quarter earnings today. Drug maker Cipla surged 2 percent but its rivals Dr Reddy's Labs and Sun Pharma lost 0.8 percent on profit booking. Even in midcap space, Cadila Healthcare lost 4.8 percent on profit-taking.

The selling in shares of ITC, HDFC, TCS, Mahindra and Mahindra, Axis Bank, Wipro and Tata Motors declined 0.3-1 percent.

12:00 pm Boardroom: HCL Tech signed over USD 5 billion worth of deals in FY14, Chief Executive Officer Anant Gupta said in an interview to CNBC-TV18. He said revenue from new clients was much higher.

In FY14 (July-June), the company added one client in USD 100 million plus category, 4 clients in the USD 50 million plus category and 16 clients in USD 20 million plus category.

For the full year the company's rupee revenues rose 27.8 percent to Rs 32,917 crore and net profit climbed 58.3 percent to Rs 6369 crore.

However, quarterly numbers fell short of market expectations.

Speaking in the same discussion, Chief Financial Officer Anil Chanana said financial services and manufacturing constituted 60 percent of IT spends and that there was enough momentum in the market.

11:50 am Interview: Integrated textile and branded apparel player, Arvind says that demand and exports remain strong for its textile business. Speaking to CNBC-TV18 about the financial performance of the company in Q1FY15, CMD Sanjay Lalbhai says the branded and retail business performed well on the EBITDA front.

The company's consolidated net profit rose by 33 percent in Q1FY15 to Rs 90.5 crore against Rs 67.6 crore in the year-ago period. Meanwhile, the company has approved demerger and transfer of its real estate business to Arvind Infrastructure Ltd (AIL), a wholly-owned subsidiary of Arvind engaged in real estate development. Explaining the rationale behind this move, Lalbhai says the demerger will unlock shareholders' value and allow AIL to raise further capital and debt as required for its growth.

11:40 am Earnings poll: Multiplex chain PVR will announce its first quarter (April-June) earnings today. According to CNBC-TV18 poll estimates, analysts expect consolidated net profit of the company to fall 30 percent year-on-year to Rs 9.5 crore but total income from operations to increase 5.5 percent to Rs 353 crore during the quarter.

Operating profit (EBITDA) may slip 11 percent to Rs 52.5 crore and margin may decline 250 basis points at 15 percent year-on-year.

Analysts expect 20 percent growth in F&B (food & beverages revenue) Y-o-Y and 15 percent growth in advertising revenue. Muted operating performance may impact companies' bottomline and margin.

11:30 am Market outlook: Dhananjay Sinha, Head - Institutional Research, Emkay Global Financial Services shared his reading and outlook on the market. According to him, fundamentals are not as robust as expected by the market. The market has run-up a lot in anticipation of a turnaround, so one would now see normalisation of expectations by the market.

Speaking about the ongoing earnings season, he said IT and pharma companies are likely to perform well. He is positive on Lupin. From the capital goods space, he is bullish on L&T and recommends accumulating the stock on dips.

Those looking to bet on midcaps should be selective while choosing any stock. He is bullish on IRB Infra and Sadbhav Engineering from the midcap infra pack.

11:20 am Buzzing: Shares of SpiceJet seems to have somewhat fixed its broken wings as its management clarified some concerns that investors had raised. After a massive 16 percent plunge yesterday, the stock gained 2 percent intraday.

The management has issued clarification stating that the airline is resolving tax issue with concerned authorities and it is fully compliant with all the safety regulations.

On Directorate General of Civil Aviation's statement of possible audit due to engineering issues, the low-cost airline said that it has youngest fleet in the country with an impeccable safety record since operations began in May 2005. Its average age of aircraft being 4.5 years, it informed.

The management clarified that the flight delay occurred due to technical snag and hence could not provide refreshments to all passengers. It has assured that processes have been adjusted for handling such issues in future.

Enthusing some confidence, the management also shared that SpiceJet has improved load factor and market share to 19 percent in 2014 with highest load factor of 81.4 percent.

It seems to be a sleepy and sloppy day as rain lashes Dalal Street on Thursday. The Sensex is up 3.30 points at 26090.72 and the Nifty is down 6.00 points at 7785.40. About 1327 shares have advanced, 907 shares declined, and 95 shares are unchanged.

Tata Steel, Cipla, Maruti, Sesa Sterlite and BHEL are top gainers in the Sensex. Steel companies gained on optimism ahead of China manufacturing PMI due on Friday. Chinese steel and iron ore futures rose to their highest in more than a week.

Wipro, Tata Power, Dr Reddy's Labs, Sun Pharma and Hero MotoCorp are among losers in the Sensex.

Gold held steady below USD 1,300 an ounce on Thursday, headed for its second monthly drop in three, as optimism over US economic growth curbed safe-haven appetite for the metal. The Federal Reserve on Wednesday upgraded its assessment of the US economy, although it also reaffirmed that it was in no rush to raise interest rates.

Data also showed that the US economy has rebounded sharply, with the gross domestic product expanding at a 4 percent annual rate in the second quarter, after shrinking at a revised 2.1 percent pace in the first.

Meanwhile, dollar is still near six-month peak after upbeat.

11:00am Amtek Auto in demand
Amtek Auto shares gained 3.6 percent as auto component maker delivered yet another strong quarter performance on all parameters with revenue growing 71 percent year-on-year to Rs 1,064.3 crore due to contribution from recent acquisitions Neumayor Tekfor and Kuepper group while profit rising 60 percent to Rs 86.08 crore. Aditionally the board approved a preferential issue of 1.25 crore convertible warrants to promoter group.

10:50am IRB Infra on buyers' radar
Shares of IRB Infrastructure Developers soared 6 percent ridding on its April-June quarter earnings. Analysts are also bullish on the stock as it sits on an impressive portfolio.

The company's Q1FY15 consolidated net profit rose 11 percent at Rs 150.4 crore against Rs 134.6 crore in a year ago period. However, net sales decreased to Rs 1,010 crore versus Rs 1,033 crore, Y-o-Y. During 1Q15, the revenue offset by higher depreciation and interest charges.

Its EBITDA jumped 23 percent at Rs 563 crore versus Rs 455 crore and EBITDA margin was up 1160 basis points at 55.7 percent against 44.1 percent, Y-o-Y. 

Macquarie has an outperform rating on the stock with an upgraded target of Rs 295 from Rs 241 on increased valuation of construction business on higher visibility of orders.

10:40am Gold below USD 1300
Gold held steady below USD 1,300 an ounce, headed for its second monthly drop in three, as optimism over US economic growth curbed safe-haven appetite for the metal.

The Federal Reserve on Wednesday upgraded its assessment of the US economy, although it also reaffirmed that it was in no rush to raise interest rates.

Data on Wednesday also showed that the US economy has rebounded sharply, with the gross domestic product expanding at a 4 percent annual rate in the second quarter, after shrinking at a revised 2.1 percent pace in the first.

Spot gold was flat at USD 1,294.45 an ounce by 0303 GMT, after dropping 0.3 percent in the previous session. It is headed for a 2.5 percent drop for the month, reports Reuters.

10:30am ICICI Bank Q1 expectations
India's largest private sector lender ICICI Bank will announce its first quarter (April-June) earnings on Thursday. According to CNBC-TV18 poll estimates, analysts expect profit of the bank to rise 13.2 percent year-on-year to Rs 2,573 crore and net interest income to increase 16.5 percent to Rs 4,450 crore during the quarter.

Asset quality may be improved in the quarter ended June 2014 as the management (after Q4FY14 earnings) had said FY14 was the peak of addition to restructured assets and the company could see less stress on asset quality in FY15.

10:20am Interview
Integrated textile and branded apparel player, Arvind says that demand and exports remain strong for its textile business. Speaking to CNBC-TV18 about the financial performance of the company in Q1FY15, CMD Sanjay Lalbhai says the branded and retail business performed well on the EBITDA front.

The company's consolidated net profit rose by 33 percent in Q1FY15 to Rs 90.5 crore against Rs 67.6 crore in the year-ago period.

He further adds that the company is looking to demerge its realty business to unlock shareholders' value as this segment is well established and has performed well over the years.

It has nearly 11 development projects underway and is hopeful of listing the real estate company by April 2015.

10:10am FII View
Neelkanth Mishra, Credit Suisse said since June 9, "defensive" sectors such as healthcare and IT are up 15-20 percent, and have outperformed cyclicals. "The early start of this reversal is likely because the increase in P/E for these sectors, in particular materials and industrials, has been excessive. P/E multiples for these sectors are now several standard deviations away from the mean P/E," he added.

With hopes of a revival in earnings fading rapidly for these sectors, the brokerage believes investors are best advised to stay long sectors where earnings trends remain strong, i.e., NBFCs, consumer discretionary and IT names, followed by healthcare and staples, he said. The brokerage remains constructive on the broader Indian market, he added.

10:00am Equity benchmarks remained marginally under pressure today with the 50-share NSE Nifty falling 11 points to 7780.50 on expiry of July derivative contracts. The 30-share BSE Sensex declined 18.25 points to 26069.17.

However, the broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices gaining 0.5 percent each. About 1035 shares have advanced, 738 shares declined, and 57 shares are unchanged on the BSE.

In the technology space, HCL Technologies lost 2 percent despite 13 percent sequential growth in profit for April-June quarter. Wipro declined 1.5 percent while TCS, Infosys and Tech Mahindra (ahead of numbers today) slipped marginally.

Top private sector lender ICICI Bank dropped 0.3 percent ahead of first quarter earnings.

Dr Reddy's Labs declined over a percent on profit booking as it had rallied 2 percent in previous session on Q1 earnings. Housing finance company HDFC lost 0.6 percent.

However, Tata Steel, Cipla and Sesa Sterlite gained 1-2 percent. Maruti Suzuki rose 0.9 percent ahead of quarterly earnings and L&T advanced 0.8 percent.

10:00 am Poll: India's largest car maker Maruti Suzuki will announce its first quarter (April-June) earnings. According to CNBC-TV18 poll estimates, analysts expect a 15.5 percent year-on-year growth in profit after tax at Rs 730 crore on account of higher sales and operational performance. Revenue is seen going up by 11 percent at Rs 11,350 crore in the quarter ended June 2014 from Rs 10,237.3 crore in same quarter last year.

Operating profit (EBITDA) of the company may grow 17 percent on yearly basis to Rs 1,365 crore and margin may expand 60 basis points to 12 percent in the quarter gone by. After 3 straight years of subdued growth, the company's volumes showed signs of turnaround in April-June quarter. Total volumes increased by 13 percent Y-o-Y to 2.99 lakh units led by success of Celerio launched in February 2014 and exports growth of 39 percent. Domestic volumes growth in the quarter was 10.3 percent.

9:50 am Buzzing: Shares of IRB Infrastructure Developers soared 7 percent intraday on  ridding on its April-June quarter earnings. Analysts are also bullish on the stock as it sits on an impressive portfolio.

The company's Q1FY15 consolidated net profit rose 11 percent at Rs 150.4 crore against Rs 134.6 crore in a year ago period. However, net sales decreased to Rs 1,010 crore versus Rs 1,033 crore, Y-o-Y. Its EBITDA jumped 23 percent at Rs 563 crore versus Rs 455 crore and EBITDA margin was up 1160 basis points at 55.7 percent against 44.1 percent, Y-o-Y.  

Macquaire has an outperform rating on the stock with an upgraded target of Rs 295 from Rs 241 on increased valuation of construction business on higher visibility of orders.

9:40 am Results: HCL Tech 's fourth quarter (April-June) net profit rose 13 percent quarter-on-quarter to Rs 1834 crore, ahead of a CNBC-TV18 poll estimate of Rs 1611 crore. Quarterly revenues were up 1 percent sequentially to Rs 8424 crore, compared to the poll estimate of Rs 84448.2 crore.

The company's quarterly dollar revenues stood at USD 1.407 billion, up 3.4 percent Q-o-Q and slightly below the polls estimate of USD 1.412 billion. Earnings before interest and taxes (EBIT) declined 1 percent to Operating margin declined 50 basis points sequentially to 24.2 percent, but was ahead of the poll estimate of 23.6 percent to Rs 2038 crore.

9:30 am International market: James Glassman, Managing Director and Senior Economist with JP Morgan Chase in an interview  said, ''I personally believe that the US economy is only half way out of the recession, so that means we still got a little bit of time for good growth before we have to start worrying about the Federal Reserve raising interest rate and I think that message is coming through their own statements."

The central bank has cut its monthly asset purchases to USD 25 billion from USF 35 billion, leaving it on course to shutter the programme this fall. The Fed reiterated that it would likely keep rates near zero for a "considerable time" after its bond buying ends and restated that an "accommodative" policy was needed.

The market is flat on July series F&O expiry day. The Sensex is down 34.99 points at 26052.43 and the Nifty is down 15.95 points at 7775.45. About 423 shares have advanced, 295 shares declined, and 37 shares are unchanged.

Sesa Sterlite, Maruti, Bharti, ITC and GAIL are top gainers in the Sensex. Among the losers are Axis Bank, Hindalco, TCS and BHEL.

The Indian rupee has opened lower at 60.24 a dollar, down 18 paise compared to previous day's closing value of 60.06 per dollar.Mohan Shenoi, Kotak Mahindra Bank said FOMC policy decision was in-line with market expectation. "US Q2 GDP was stronger than expectation leading to dollar strength against major currencies," he added.

According to him, month-end dollar demand from importers in the local market is neutralised by dollar sales by custodial banks. He expects the rupee to trade in a range of 59.90-60.20/USD today.

Asian equities were mixed following robust US economic data and as investors braced for Argentina to default on its debt for the second time in twelve years. Argentina's debt mediator said the country "will imminently be in default" late following two days of discussions between Argentina and hedge funds but the country's finance minister maintains that there is no default situation, reiterating that Buenos Aires has sent its required payments to trustee banks.

On Wall Street, the S&P 500 and Nasdaq ended higher after US growth in the second quarter expanded 4 percent, compared with a 2.1 percent contraction in the previous three months.