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Wednesday, April 11, 2007
Sharekhan Eagle Eye (equities) & Derivatives Info Kit for April 12, 2007 & Sharekhan Daring Derivatives for April 12, 2007
Sharekhan Daring Derivatives for April 12, 2007
Sharekhan Eagle Eye (equities) & Derivatives Info Kit for April 12, 2007
Market Close: Looking for direction ahead of the results !
It was yet another day of consolidation and the markets ended flat with positive bias which opened with mild gap up tracking the positive Asian cues. Indices continued to trade with moderate gains on the back of buying seen in Metal and Capital Good sector but it was off the track on account of selling pressure seen in select stocks in FMCG, Pharma and cement. Profit-booking at higher levels saw the index pare gains and move in a narrow range. Results season has been started with few companies posting results but big Daddy Infosys, is due on Friday is most awaited to give direction. We believe nothing much is likely to change as clearly the guidance will not be bullish. Asian markets traded higher while European markets trading in green.
Sensex ended a point higher. It was supported by gains in Hindalco (+4.77%), Tata Steel (+3.42%), Bharati Airtel (+1.56%) and BHEL (+1.20%). Restricting the gains were Ranbaxy (-4.02%), Dr. Reddy?s (-2.81%), Gujarat Ambuja (-2.29%) and ACC (-1.88%).
Welspun Gujarat Stahl Rohren Ltd (WGSRL) has planned to bid for pipeline projects in Saudi Arabia, Iran and Indonesia. The company shall also approach oil and gas companies in the Middle East, North America and Asia. The metal pipes manufacturer is also likely to bag more orders from the US. Middle East, Qatar and Iran have the largest gas reserves in the world and are planning to develop them commercially. Even, Saudi Arabia has lined up mega projects of $45 billion to increase oil production, build petrochemicals complex and new pipelines. Welspun Gujarat will get many opportunities to encash huge profits from countries like Brazil, Indonesia, China and India, which have plans to build gas pipelines. Russia is also planning to build gas pipelines to supply China with natural gas. Welspun's SAW pipe sales have grown at a CAGR of 37% over FY03-06. In the past, Welspun has supplied pipes to oil and gas majors like British Gas, Exxon Mobil, and Shell. Welspun Gujarat ended up by 10% while its peer Jindal Stainless closed marginally up 1%.
Mastek announced third quarter results which reported net profit of Rs 23.8 cr (Rs 238 mn) in the third quarter vs Rs 21.8 cr (Rs 218 mn) in the previous quarter a growth of 9.17%. Its total income was up 2.38% to Rs 214.8 cr (Rs 2.14 bn) from Rs 209.8 cr (Rs 2.09 bn). The company's US operation has gone up by 27% QoQ. The stock closed marginally down by 1% on the general downtrend.
iGATE Global Solutions reported revenue of Rs 805.1 crore for the year ended March 2007 as against Rs 635.8 crore in the previous year. Net profit for FY07 increased to Rs 49.8 crore, a sharp spurt of 805.5% from Rs 5.50 crore in FY06. For the fourth quarter ended March 2007, the company?s revenues increased 25.50% to Rs 210.1 crore compared to Rs 167.4 crore in the corresponding quarter previous year. While net profit for Q4 FY07 surged 381% to Rs 22.6 crore from Rs 4.7 crore in Q4 FY06. However, operating revenue for the 4th quarter was adversely impacted by 2.1% due to the strengthening of the rupee against the US Dollar. But the overall Margins have not been impacted due hedging. During the recently concluded quarter, iGATE added six new clients largely for IT services. The stock ended down by 4.6% on indications that next quarter would be sluggish.
Technically Speaking: Market witnessed a Yoyo session to end in flat. Sensex is still stuck and finding it tough to move over the band of 13200-13400, which a very crucial range. Bull power will be clearly evident if this level is crossed. On the lower side, support is at 12940. Market turnover stood at Rs 3847 cr. Overall breadth was in favor of Advances as advancers were 1548 against decliners of 1027.
Sensex slips after a five-session rally
Continuing its upward move for the sixth straight session the Sensex opened with a positive gap of 32 points at 13222 on the back of positive global cues. The Sensex touched the day's high of 13295 amid some volatility in the heavyweights. The index struggled to make headway in the afternoon. Sustained selling in banking, pharma and information technology stocks towards the close pulled down the Sensex to an intra-day low of 13161. The Sensex managed to pare some losses and ended the session at 13183, down six points. The Nifty closed at 3863, up 14 points.
The breadth of the market was positive. Of the 2,632 stocks traded on the BSE, 1,531 stocks advanced, 1,037 stocks declined and 64 stocks ended unchanged. Among the sectoral indices the BSE Metal Index advanced by 3.68% at 9331 followed by the BSE CG Index (up 1.11% at 9342). However, the BSE Bankex, the BSE HC Index, the BSE IT Index, the BSE Teck Index and the BSE FMCG Index closed in negative territory.
Very few Sensex stocks moved up significantly. Hindalco surged 4.40% at Rs142, Tata Steel advanced 3.29% at Rs512, Bharti Airtel added 1.24% at Rs774, BHEL rose 1.22% at Rs2,493 and Cipla gained 1.07% at Rs236. ONGC, Bajaj Auto, ITC, Reliance Industries and NTPC closed with marginal gains. Among the laggards Ranbaxy tumbled 3.49% at Rs345, Dr Reddy's slipped 2.59% at Rs701, ACC was down 1.98% at Rs731 and HDFC dropped 1.55% at Rs1,583. Reliance Communications, Gujarat Ambuja, HDFC Bank, SBI and Satyam Computers ended with marginal losses.
Metal stocks were in the limelight. Shree Precoated soared 10% at Rs343, Nalco surged 6.43% at Rs247, Sterlite Industries added 5.70% at Rs506, Jindal Steel advanced 4.73% at Rs2,601 and SAIL gained 4.29% at Rs123. Maharashtra Seamless, Hindustan Zinc and Jindal Saw were up 3-4% each.
Over 1.31 crore Reliance Natural Resources shares changed hands on the BSE followed by IFCI (1.28 crore shares), Gremach Infrastructure (1.03 crore shares), India Bulls Real Estate (63.80 lakh shares) and SAIL (52.41 lakh shares).
Value-wise India Bulls Real Estate registered a turnover of Rs190 crore on the BSE followed by India Bulls (Rs171 crore), Mindtree (Rs136 crore), Tata Steel (Rs133 crore) and BHEL (Rs99 crore).
Five-day rally halts
The market ended its five-day winning streak, as selling pressure emerged in later half of the day’s trading session. However the losses were marginal. While metal and capital goods stocks lifted the markets, banking and IT shares pulled it lower.
The 30-shares BSE Sensex settled 6.30 points or 0.05% lower at 13183.24. It opened higher at 13221.76, and struck a fresh intra-day high of 13,294.90, a little while ago, as buying intensified. Its low for the day was at 13,161.21, touched in late afternoon session of trades. Prior to today’s trading session, the Sensex had advanced from 12455.37 on 2 April to 13189.54 on 10 April.
However, the S&P CNX Nifty gained 14.50 points or 0.38% to finish at 3862.65
Even as the market was flat, there was lot of action outside the index stocks, whoch was reflected in strong market-breadth on BSE. There were close to 1.5 gainers for every loser. Against 1,548 shares advancing on BSE, 1027 declined, while 72 remained unchanged. The BSE Mid-Cap Index ended at 5,517.06 up 55.55 points or 1.02%, while the BSE Small-Cap Index gained 54.77 points or 0.82% at 6,711.51
The total turnover on BSE amounted to Rs 3943.40 crore while the total market wide turnover was at Rs 34797.55 crore as compared to Rs 34669.31 crore on Tuesday
Among the Sensex pack, 16 declined while the rest advanced
Shares from the metal pack were stars of the day’s trading session. The BSE Metal Index closed at 9,330.87 up 3.68%, following steady rise in LME prices. Copper futures for three months delivery were up 2% today at $7910 a tonne on LME, a seven-month high. Base metals had recorded an across the board rise on Tuesday (10 April).
The ongoing rise in copper prices is due to falling inventories, strong demand from China and last week’s strong US job data. Copper inventories declined by 2100 tonnes to stand at 175500 tonnes today, shedding 15% in the last one month on strong demand for the red metal from China. The inventories of all base metals except lead dipped today.
Aluminum and copper major Hindalco Industries jumped 5% to Rs 143, on high volumes of 16.88 lakh shares and was the top gainer.
India’s largest private sector steel manufacturer Tata Steel followed with gain of 3.42% to Rs 512.50 on high volumes of 26.01 lakh shares. It had surged to a high of Rs 519. There are reports that it is likely to launch a rights issue of nearly Rs 3,500 crore to part-finance its $12.15 billion acquisition of Anglo-Dutch steelmaker Corus Group, payment for which is to be made today. The issue may be priced at around Rs 400 a share. The Tata Steel stock advanced close to 17% in the past one week, anticipating such a move from the company. If approved, this will be the third rights issue by Tata Steel in the last 22 years. The company issued 1:3 rights offer in 1988 and 2:5 offer in 1993.
Nalco (up 6.86%), Sterlite Industries (up 6%), SAIL (up 4.20%), Hindustan Zinc (up 3.54%) and Jindal Steel & Power (up 4.73%) higher.
Welspun Guj Stahl Rhoren jumped 12.22% to Rs 117, after reports that it is gearing up to bid for pipeline projects in Saudi Arabia, Iran and Indonesia. Reports also suggest the company is expected to win more orders from the US.
Shares from the capital goods advanced in anticipation of robust set of results for March quarter. The BSE Capital Goods Index was up 1.1% at 9,342.38. Gammon India (up 6.52%), Thermax (up 3.6%), Alstom Projects (up 2.75%), Bhel (up 1.33%) and Suzlon Energy (up 7.10%).
Bharti Airtel (up 1.43% to Rs 775), and Cipla (up 1.20% to Rs 236.20), were the other gainers.
IT bellwether Infosys Technologies was down 0.41% to Rs 1190, after striking a high of Rs 2038, ahead of its Q4 March 2007 results, due on Friday, 13 April 2007. Infosys’ FY 2008 guidance will be the next major trigger for the market. The rupee’s sharp surge in late-March 2007 - early April 2007, uncertain US economic outlook and certain client-specific risks, have raised concerns that the FY 2008 guidance by Infosys Technologies may turn out conservative. Infosys unveils the full year guidance at the beginning of the financial year along with Q4 March 2007 results, on Friday, 13 April 2007.
For Q4 March 2007, Infosys has given a guidance of income to be in the range of Rs 3789 crore and Rs 3798 crore; indicating a Y-o-Y growth of 44.4% - 44.7%. The EPS is expected to be Rs 17.88; showing Y-o-Y growth of 46.3%.
For the full year ending March 2007, Infosys’ income is expected to be in the range of Rs 13,910 crore and Rs 13,919 crore; Y-o-Y growth of 46.1% - 46.2%. EPS before exceptional items is expected to be Rs 66.63, a Y-o-Y growth of 48%.
Since 2001, when the practice of coming out with a guidance started, Infosys has disappointed every alternate year on its guidance. And in five of the last six times, Infosys' stock and the broader market have fallen on results day (or in the first trading session after results, in case the markets were closed) - no matter what the guidance was.
The sole exception was 14 April 2006, when Infosys beat street estimates by guiding revenue growth of 30.7% and EPS growth of 28.4% for the just-past financial year. But on that Friday, markets were shut due to Ambedkar Jayanti. When they opened on Monday, 17 April 2007, the Infosys stock zoomed 6.93%, and the Sensex ended with a gain of 302 points (2.69%).
Other IT stocks were not spared either. Satyam Computers (down 0.34%), TCS (down 0.41%) and Wipro (down 0.23%) slipped. The BSE IT Index was down 0.4% at 4,808.08.
Overall Q4 results are expected to be strong. More important that Q4 results is what the company managements say about the outlook for the current financial year (FY 2008). Citigroup expects overall corporate earnings growth to moderate to 15-16 percent in the current and next year, while FY 2007 (year ended 31 March 2007) could be the fifth straight year of 25-30 percent earnings growth.
Index heavyweight Reliance Industries (RIL) was up 0.38% to Rs 1387.05 on 4.42 lakh shares. It advanced to a high of Rs 1398.
Pharma shares witnessed selling pressure. Ranbaxy Laboratories lost 4.02% to Rs 343.40, and was the top loser. Dr Reddy’s declined 2.76% to Rs 700.
Cement stocks witnessed renewed selling, on reports that first cement cargo from Pakistan has arrived at Rs 155 per bag as against Rs 225-240 price in domestic market. Government official says price import prices now gone up to Rs 165 per bag on high demand. Cement release will take around 28 days as BIS approval is needed. ACC (down 2.08%), Gujarat Ambuja Cements (down 2.29%), and Grasim (down 0.70%), declined.
FMCG major HLL slipped 1.77% to Rs 205.15 on 8.44 lakh shares. It slipped from a high of Rs 209.75
The BSE Bankex was down 0.7% at 6,552.92. UTI Bank (down 4.69%), Kotak Mahindra Bank (down 2.46%), Bank of India (down 1.97%), Union Bank of India (down 1.41%) SBI (down 0.99%), and HDFC Bank (down 1.19%), slipped.
Gremach Infrastructure Equipments & Projects settled at Rs 83.95, a discount over IPO price of Rs 86. Earlier today, the stock debuted at Rs 92 on BSE. It hit a low of Rs 80.70 and high of Rs 100. The counter saw high volumes of 1.03 crore shares on BSE. The company had priced its IPO at the higher end of the revised price band of Rs 72 to Rs 86 per share.
iGate Global Solutions (iGATE) slipped 4.83% to Rs 383.10, after striking a high of Rs 422, after it reported revenue of Rs 805.1 crore for the year ended March 2007 as against Rs 635.8 crore in the previous year. Net profit for FY07 increased to Rs 49.8 crore, a sharp spurt of 805.5% from Rs 5.50 crore in FY06. For the fourth quarter ended March 2007, the company’s revenues increased 25.50% to Rs 210.1 crore compared to Rs 167.4 crore in the corresponding quarter previous year. While net profit for Q4 FY07 surged 381% to Rs 22.6 crore from Rs 4.7 crore in Q4 FY06.
However, operating revenue for the quarter was adversely impacted by 2.1% due to the strengthening of the rupee against the US Dollar. During the recently concluded quarter, iGATE added six new clients largely for IT services.
India’s largest airline by marketshare, Jet Airways slumped 5.79% to Rs 607.50, after reports that it has decided to go ahead with the deal to buy out Air Sahara. The rapprochement comes in the middle of acrimonious arbitration proceedings, after Jet Airways walked out of an agreement to acquire Sahara in June last year. The transaction will now be completed in accordance with the original share purchase agreement, except for a $50 million discount in the enterprise value, reports indicated. After accounting for earlier payments and debt, Jet will now pay about Rs 950 crore for Air Sahara. Of this, about Rs 400 crore will be made in cash immediately and the remaining will be paid in four instalments.
Geometric Software jumped 16.2% to Rs 119.30 on renewed buying on expectation of strong Q4 March 2007 results.
Newspaper publisher Deccan Chronicle Holdings jumped 10% to Rs 163.55 after the company said it planned to raise advertisement tariff by 30% with effect from May 2007 across segments.
Dewan Housing Finance Corporation gained 2.56% to Rs 62.2 after the mortgage lender increased interest rates on home loans by 125 basis points with effect from 1 April 2007.
Elecon Engineering Company gained 6.63% to Rs 412 after the company said it has bagged a contract worth Rs 229.09 crore from NTPC for supply and installation of coal handling plant package for National Capital Termal Power Project (NCTPP), Dadri, Stage II from NTPC.
The Nikkei share average closed little changed on Wednesday as investors sold shares of Fanuc Ltd. and other machine makers following downbeat machinery orders data, offsetting gains in property and other domestic demand-related stocks. The Nikkei closed up 0.03% or 5.38 points at 17,670.07.
Hang Seng was up 0.50% or 101.56 points to 20449.43
US stocks edged higher on Tuesday (10 April) as a rebound in oil prices lifted energy shares and Citigroup gained on expectations of big job cuts. The Dow Jones industrial average rose 4.71 points, or 0.04 percent, to end at 12,573.85. The Standard & Poor's 500 Index gained 3.78 points, or 0.26 percent, to 1,448.39. The Nasdaq Composite Index advanced 8.43 points, or 0.34 percent, to 2,477.61.
FIIs have resumed buying ahead of the corporate earnings season. They were net buyers to the tune of Rs 569.40 crore on Monday (9 April), the day when Sensex had surged 322 points on firm global bourses. They were net buyers to the tune of Rs 567.50 crore on 5 April. As per provisional data, FIIs were net buyers to the tune of Rs 350 crore on Tuesday 10 April, the day when Sensex had gained 12 points.
FIIs were net buyers to the tune of Rs 114 crore in index-based futures on Tuesday. They were net buyers to the tune of Rs 60 crore in individual stock futures on that day.
Oil prices steadied on Wednesday after gains on Tuesday as investors turned attention to Iran's nuclear activities and dwindling gasoline stocks in the United States, the top consumer. US crude for May delivery was down 2 cents at $61.87 a barrel
Intra-day Stock Ideas
NIFTY (3848.15) SUP 3826 RES 3865
BUY IOC (406.8)
SL 401 T 416, 419
BUY RANBAXY (357.90)
SL 352 T 366, 369
BUY BANKINDIA (172.20)
SL 168 T 180, 182
SELL MPHASIS (274.95)
@ 277 SL 281 T 267, 265
SELL DRREDDY (720.50)
@ 724 SL 728 T 714, 711
STRATEGY INPUTS FOR THE DAY
Good, flat, now what?
An unhurried sense of time is in itself a form of wealth.
We've had a good Monday, a flat Tuesday and perhaps some kind of Wednesday wear out is in the offing later in the day. There is no need to rush in and do something which you are not convinced off. Take your time to pick and choose carefully. Global cues indicate we are in for another volatile day. Stock indices in the US closed flat and Asian markets are marginally in the positive zone. Oil prices are hovering under the $62 per barrel mark. FIIs were net buyers to the tune of Rs3.5bn (provisional) in the cash segment yesterday. In the F&O segment, they pumped in Rs1.12bn. On Thursday, they were net buyers at Rs5.69bn in the cash segment. Mutual Funds were net buyers of Rs463.2mn on the same day.
Going by these indicators, the market should open in the green. But, uncertainty ahead of Friday's Infosys results will keep the bulls on tenterhooks. With so much being made out of the rupee's appreciation and its impact on IT firms, a positive surprise from the likes of Infosys and TCS could change the short-term outlook for the market. What's more, even if the software majors' numbers are slightly disappointing, the market should hold up as negative expectations have already been built into the stock prices. The wild card will be Infosys' guidance.
And remember, the market is not just about IT companies. There is a broader market out there, which is driven more by factors such as inflation, interest rates, the health of the US economy, overheating in China, the yen carry trade and fund flows to emerging markets et al. Right now things are looking sanguine but be prepared for sudden jolts.
iGate Global has come out with its numbers for Q4FY07. Its net profit is at Rs22.6 crore vs Rs15.95 crore QoQ. Revenues are at Rs210.1 crore vs Rs210.7 crore Qoq. EPS is at around Rs16. Operating margins are reportedly on a higher side while the topline is lower than expected.
Mastek will announce its results today. Not much is expected out of the mid-cap software firms, as the focus remains on the heavyweights like Infosys and TCS. Nonetheless, a 1.7% gain in the rupee in the January-March quarter is likely to hit their margins.
US stocks finished barely changed on Tuesday, as investors remained cautious ahead of the start of the quarterly earnings season. But, the Dow Jones Industrial Average eked out gains for the eighth session in a row, its longest winning streak since 2003, buoyed by improved profit outlook for Intel and Exxon Mobil.
Energy shares rose to a record and accounted for 54% of the Standard & Poor's 500 Index's sixth consecutive increase after oil prices rose for the first time in five days.
The Dow Jones added 4.71 points to 12,573.85. The S&P 500 rose 3.78 points, or 0.3%, to 1448.39, leaving it within 1 point of erasing all of its losses from the Feb. 27 global sell-off. The Nasdaq Composite Index increased 8.43 points, or 0.3%, to 2477.61.
After the close, Dow component Alcoa reported higher quarterly earnings and revenue that topped estimates, jump starting the earnings period on a positive note. Shares gained more than 1.5% in extended-hours trading.
US light crude oil for May delivery rose 38 cents to settle at $61.89 a barrel on the New York Mercantile Exchange after slumping 4 percent Monday on fund selling and relief about the developments in Iran. The front-month contract was quoting nearly unchanged at $61.89 a barrel in extended trading in Asia.
COMEX gold for June delivery added $4.60 to settle at $681.50 an ounce. Treasury prices rose, lowering the yield on the 10-year note to 4.72% from 4.75% late on Monday. In currency trading, the dollar fell versus the euro and the yen.
European stock markets advanced. In the first day of trading since the markets' four-day Easter break, the German DAX 30 closed up 0.9% at 7,166.67. The UK's FTSE 100 added 0.3% to 6,417.80, while the French CAC 40 gained 0.4% at 5,766.27. The pan-European Dow Jones Stoxx 600 index added 0.5% to 382.21.
Asian stocks rose for a third day on Wednesday. Samsung Electronics and AU Optronics gained after LG.Philips LCD reported a loss that was smaller than some analyst estimates. The Nikkei in Tokyo was up 14 points at 17,679 while the Hang Seng in Hong Kong lost 20 points at 20,327. The Kospi in Seoul advanced 17 points to 1516 and the Straits Times in Singapore shed 3 points at 3419.
In the emerging market space, the Bovespa in Brazil was up 0.7% at 47,174 while the IPC index in Mexico was 0.4% down at 29,515 and the RTS index in Russia gained 0.7% at 1977.
HOW MARKET FARED
Volatile market ends flat
The markets after opening on a volatile mode managed to close flat in green. Technology and Banking stocks were the major losers. However, Metal, FMCG and oil refinery stocks bucked the negative trend aiding the key indices to close higher. Mid-Cap and small cap index outperformed against the frontline indices. Finally, the 30-share benchmark Sensex was flat at 13189. NSE Nifty was also flat at 3848. Satyam Computer, Infosys and Wipro were among the major losers however BPCL, Sun Pharma and HDFC were among the major gainers.
Indiabulls surged by over 12% to Rs502. Reports suggest that the securities broking firm has asked some of its employees to leave and shut some offices. The company denied any such development. The scrip touched an intra-day high of Rs530 and a low of Rs436 and recorded volumes of over 1,00,00,000 shares on NSE.
ABG Shipyard gained 1.8% to Rs362 after the company secured $139mn order from Essar Shipping unit. The scrip touched an intra-day high of Rs385 and a low of Rs351 and recorded volumes of over 9,00,000 shares on BSE.
Prism Cement was up 1.5% to Rs33 as reports stated that the company announced its Q3 result with net profit at Rs550mn and sales at Rs2.02bn up 21%. The scrip touched an intra-day high of Rs35 and a low of Rs33 and recorded volumes of over 24,00,000 shares on NSE.
Sesa Goa advanced by over 2.5% to Rs1756 amid an ongoing bidding war, where Arcelor Mittal still seems to be the frontrunner. The scrip touched an intra-day high of Rs1799 and a low of Rs1720 and recorded volumes of over 7,00,000 shares on NSE.
Technology stocks were on the receiving end on back of profit booking. Index heavy weight led the fall Satyam Computer declined by over 3.5% to Rs445, Wipro slipped by 2.4% to Rs547 and Infosys dropped by 2.4% to Rs1998. MphasiS BFL and HCL Tech were the major losers among the Mid-Cap stocks.
Oil Refinery stocks were on the move crude oil slipped sharply. BPCL jumped by over 5% to Rs329, HPCL gained 1.8% to Rs258 and IOC added 2.5% to Rs405 as reports stated that the company may participate in a project to build a $7 billion refinery in Russia with the capacity to process up to 15mn metric tons of crude oil a year.
Steel stocks shined as reports stated that steel companies have raised HR coil prices by Rs1000 per tonne. JSW Steel surged by over 4.5% to Rs532, Essar Steel rose over 3% to Rs38, Tisco was up by 0.5% to Rs495 and Jindal Steel added 2.9% to Rs2485.
Auto stocks were a mixed bag. Tata Motors advanced by 2.6% to Rs721, Hero Honda edged higher by 0.2% to Rs640. However, Bajaj Auto dropped by 1.2% to Rs2270 and M&M was down 1% to Rs727
Market Watch
Insider Trades:
Sakthi Sugars Ltd: 1) Morgan Stanley & Co. International Ltd., A/c Morgan Stanley Dean Witter Mauritius Co. Ltd. 2) Morgan Stanley & Co. International Ltd., A/c Morgan Stanley Investment Mauritius Ltd has purchased from open market 418000 equity shares of Sakthi Sugars Ltd on 4th April, 2007.
Granules India Limited: 1) Morgan Stanley & Co. International Limited a/c Morgan Stanley Dean Witter Mauritius Co. Ltd. 2) Morgan Stanley & Co. International Limited A/C Morgan Stanley Investment Mauritius Ltd has purchased from open market 34946 equity shares of Granules India Limited on 5th April, 2007.
Market Volumes:
The turnover on NSE was up by 34% to Rs84.41bn. BSE FMCG index was the major gainer and gained 2.18%. BSE Metal index (up 1.07%), BSE PSU index (up 0.38%) and BSE Consumer Durable index (up 0.34%) were among the other major gainers. However, BSE Technology index lost 1.07%.
Volume Toppers:
IFCI, Indiabulls, SAIL, IB Real Estate, SRF, Tata Steel, R Com, ITC, IDFC, Nagarjuna Fertilizers, Gujarat Ambuja, NTPC, Satyam Computer, Bank of India, JP Hydro, India Cement, Page Industries, Indian Hotels, Gitanjali Gems and Ashok Leyland
Upper Circuit:
Marksons, Teledata Informatics, TV Today, India Infoline, PBA Infrastructure, Vyapar Industries, Shree Precoated, Garware Offshore, Goldiam International, Marg Construction and Atlanta
Abnormal Delivery:
Tata Tea, Andhra Bank, Colgate-Palmolive, Indian Hotels, BEL, GAIL, Ranbaxy Laboratories, Housing Development Finance Corporation Ltd, Tata Power, Bajaj Auto and ACC.
Delivery Delight:
3i Infotech, Adlabs Films, Arvind Mills, Bank of India, Bharati Shipyard, Gateway Distriparks, Federal Bank, Industrial Development Bank Of India, ITC, Jaiprakash Associates, Moser Baer, Tata Motors, TV TODAY and VSNL.
Stock Futures with Largest Increases in OI:
Indian Bank, Jet Airways, strides Arcolab, BEL, ICICI Bank, Infosys, Satyam Computers, IVRCL Infra, NDTV and Aban Offshore
Stock Futures with Largest Decreases in OI:
Crompton Greaves, Bank of India, Srf, Chennai Petroleum, PFC, United Spirits, GMR Infra, VSNl, Gujarat Alkalies and Tata Motors.
Brokers Recommendations:
Reliance Comm – Outperform from CLSA with target of Rs486
Mphasis BFL – Buy from Man Financial with target of Rs390
Long Term investment:
Reliance Petroleum Ltd.
Major News Headlines
Jet to acquire Air Sahara at around Rs19.5bn
ICICI Bank fined by Hong Kong Regulator for license breach
Steel companies raises HR coil prices by Rs1000 per ton – Reports
Tata Steel to meet on April 17 to consider fund raising plans for Corus acquisition
i-flex solutions gets order from allied Irish Bank
ABG Shipyard wins $139mn order from Essar Shipping unit
Subhash Projects gets orders worth Rs3.09bn
Suzlon raises bid for REpower to 150 Euros and gets order for turbine generators from US.
Upmove may continue
The Dow industrials recording the gains for an eighth straight session on Tuesday, the longest winning streak in four years and firm Asian indices in the morning trades may help the market to open in the green. Major Asian indices like Nikkei, Hang Seng, Kospi and Jakarta Composite are trading with the marginal gains. On the upside, the Nifty could test the recent high around the 3900 level and may witness support around the 3775 level. The Sensex has a likely support at 13050 and may test higher levels of 13250.
In the US markets, the broader Dow Jones scaled up by five points at 12574, and the tech-heavy Nasdaq moved up by eight points to close at 2476.
Indian floats also gained on the US bourses. Tata Motors was the major gainer and rose 1.57% while Wipro, Patni, Rediff, HDFC Bank, ICICI Bank and ended with steady gains. Among the laggards Infosysys, Satyam , Dr Reddys's and MTNL were slightly down.
Crude oil prices in the global market rose yesterday. The Nymex light crude oil for May series gained 38 cents at $61.89 per barrel. In the commodity segment, the Comex gold for June delivery jumped $4.60 to settle at $681.50 an ounce.
Anand Rathi - Daily Technical Note & Anand Rathi Daily Strategist
Nifty and Sensex have exhibited narrow candlesticks.
Technically, one may use the level of 3745 (Nifty) and 12900 (Sensex) as the stop loss level.
Nifty faces resistance at 3900 and Sensex at 13400.
BSE Smallcap and BSE Midcap Indices have exhibited a bullish candlestick.
CNX IT has lost ground.
In the Punter's zone we have a buy in Mind Tree , Biocon & Reliance Industries.
In the technical zone we have a buy in Indian Hotels , Balaji Tele & Torrent Power.
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The NIFTY futures saw a decrease in OI 1.23% with prices closing up as expected indicating that lot of shorts positions were cut. The discount in nifty futures decreased indicating that bears aggressively covered & the bulls got them cornered .We feel that till the market sustains above 3750 levels we see aggressive short covering and fresh money coming in the market only after the first major result shall set the trend .The FIIs were buyers in futures to the tune of 112 crores of which they bought nifty futures alone to the tune of 114crs and sold options worth 59.54 crs .The PCR is in a range of 00.97 indicating the trend in the market. .The volatility has remained in the range of 26.50 levels indicating the feel in the market.
Among the Big guns, ONGC saw a gain of 4.17 OI with prices going up by 0.34% indicating that fresh longs being built in the counter along with fresh genuine buying while RELIANCE lost OI and the price was unchanged.
On the TECH front, INFOSYSTCH, SATYAM, TCS & WIPRO saw decrease in prices showing weakness in the markets, and forced long positions to sell with some fresh shorts formed there. This may be the results taken into account by players.
On the other hand the BANKING counters saw open interest gaining with loss in value. Also we saw the genuine selling coming in P.S.U banks like S.B.I & P.N.B and across the board prices loosing value in the sector .The rest like ICICI BANK & HDFC BANK saw short positions being built and fresh bull liquidations.
In the METALS there was a mixed bag with some gaining and the others loosing value clearly indicating the un-clear feeling there in the sector?
Considering the market data, it suggests the most awaited expected trend has shall only happen after the INFOSYS result and finally set the decorum in the week for the settlement and the new financial year , for the same it is advisable to traders to have strict stop losses.
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Market may see stock-specific activity
Select side counter surged on Tuesday (10 April) even as Sensex ended little changed on that day. If this is any indication, stock specific activity has started based on Q4 results expectations.
Overall Q4 results are expected to be strong. More important that Q4 results is what the company managements say about the outlook for the current financial year (FY 2008). Citigroup expects overall corporate earnings growth to moderate to 15-16 percent in the current and next year, while FY 2007 (year ended 31 March 2007) could be the fifth straight year of 25-30 percent earnings growth.
IT bellwether Infosys kickstarts the earnings season on Friday 13 April. The rupee’s sharp surge in late-March 2007 - early April 2007 against the US dollar and mixed reports from the US economy, have raised concerns that the FY 2008 guidance by Infosys may turn out conservative. Infosys unveils full year guidance at the beginning of the financial year along with Q4 March results.
Firm global markets and FII inflow may keep domestic bourses firm in the near term. Asian stocks edged higher on Wednesday (11 April), with Seoul hitting a record high for the sixth straight session, but Tokyo's Nikkei lagged gainers after weak Japanese manufacturing data cast doubt on capital spending. Nikkei was up 0.08%. The data reinforced expectations that the Bank of Japan will not be in a hurry to raise rates.
Other Asian stock markets were encouraged by gains on Wall Street. Key benchmark indices in Hong Kong, China, South Korea and Singapore were up by between 0.06% to 1.1%.
US stocks edged higher on Tuesday (10 April) as a rebound in oil prices lifted energy shares and Citigroup gained on expectations of big job cuts. The Dow Jones industrial average rose 4.71 points, or 0.04 percent, to end at 12,573.85. The Standard & Poor's 500 Index gained 3.78 points, or 0.26 percent, to 1,448.39. The Nasdaq Composite Index advanced 8.43 points, or 0.34 percent, to 2,477.61.
FIIs have resumed buying ahead of the corporate earnings season. They were net buyers to the tune of Rs 569.40 crore on Monday (9 April), the day when Sensex had surged 322 points on firm global bourses. They were net buyers to the tune of Rs 567.50 crore on 5 April. As per provisional data, FIIs were net buyers to the tune of Rs 350 crore on Tuesday 10 April, the day when Sensex had gained 12 points.
FIIs were net buyers to the tune of Rs 114 crore in index-based futures on Tuesday. They were net buyers to the tune of Rs 60 crore in individual stock futures on that day.
Oil prices steadied on Wednesday after gains on Tuesday as investors turned attention to Iran's nuclear activities and dwindling gasoline stocks in the United States, the top consumer. US crude for May delivery was down 2 cents at $61.87 a barrel.
US Market closes higher for straight eighth session
Dow's 8 day winning streak could have been snapped if not for 1.6% and 1% rise in Exxon Mobil and Citigroup shares
US Market posted its first eight-straight day gains in current year on Tuesday. While Dow was up for the 8th consecutive day, S&P 500 was up for the 6th consecutive day. Dow recorded its longest winning streak since March 2003. With a lack of corporate news and scheduled economic data, a sense of caution prevailed among investors that typically precede the start of earnings season. But market gains were modest at the day’s close. But Dow's streak would have been snapped if not for 1.6% and 1% rise in Exxon Mobil and Citigroup shares respectively.
Among the nine sectors finishing in positive territory, Energy was the only one posting a respectable gain though its 1.4% advance was mainly due to a rebound in oil prices.
17 out of 30 stocks closed higher on Tuesday. For the day (10 April, Tuesday) the Dow Jones Industrial Average closed higher by 4.71 points at 12573.85, Nasdaq higher by 8.43 points at 2477.61 and S&P 500 higher by 3.78 points at 1448.39. Exxon Mobil, Citigroup, Intel and Boeing were the main Dow winners while H-P, United Technologies, Wal-Mart and Du-Pont were the main Dow losers.
With this continuous 8 days of winning streak, Dow is up by 0.9% for 2007. Nasdaq is up by 2.6% and S&P 500 is up by 2.1%.
Among blue chips, Alcoa rose 0.09% before its results after the close. Alcoa was the best performing Dow component during the first quarter. Alcoa is up more than 16% so far in 2007 and tops among the 30 Dow stocks. Citigroup rose 1.6% ahead of a presentation tomorrow on job cuts. The New York Times reported that the bank will cut or reassign 26,000 positions.
Warning from Seagate Technologies leaves investors questioning Tech sector’s growth prospects
When market opened in the morning, stocks opened with little fanfare. Of the six sectors trading higher, Energy was the only one posting a respectable gain; but its modest 0.5% advance was also at the expense of rising oil prices. Absence of leadership from the influential Tech sector minimized market gains.
But within an hour of trading, market improved its stance and the same came from a turnaround in Technology. It was fueled primarily by several analyst upgrades (Oracle).
However, Seagate Technology warning that Q3 revenue will miss forecasts left investors questioning the Tech sector’s growth prospects. Tech is expected to be one of the S&P 500's biggest earnings drivers this year. A 37% drop in Q2 net sales orders at D.R. Horton also imparted some sort of nervousness among investors. Seagate Tech shares fell 6.2% to $22.
After witnessing their biggest slide in 3 months yesterday, crude futures gained marginally today. Crude-oil futures for light sweet crude for May delivery closed at $61.89/barrel (higher by $0.38/barrel or 0.62%) on the New York Mercantile Exchange. Crude prices were mainly pulled up higher today by gasoline prices, on speculation that the weekly government report tomorrow will show U.S. gasoline stockpiles declined for a ninth week. A surge in natural-gas futures, which followed comments from the U.S. Department of Energy that demand would remain strong through the summer, also boosted energy prices.
In the broad market for equities, there were 1.331 billion shares exchanging hands on the New York Stock Exchange and 1.867 billion trading on the Nasdaq stock market. Advancing issues outpaced decliners by 5 to 3 on the NYSE and by 16 to 13 on the Nasdaq.
After the close, Alcoa came out with its earnings report beating Wall Street estimates with a 9% earnings gain. The company earned 79 cents a share after excluding restructuring charges as against Wall Street’s expectations of 77 cents a share. Revenue was up 11% to $7.9 billion. Earnings were driven by higher metal prices and sales in the aerospace, building and construction and industrial product markets.
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