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Wednesday, May 16, 2007
Good Evening - May 16 2007
Key indices were mixed early today amid volatile trade due to uncertain market direction. Weak cues from Asian and U.S. markets also played spoilsport. At 10:35AM, Sensex was 13976.91, up 12.12 points or 0.1% after touching a low of 13965.86. Nifty was at 4131.80, down 2.10 points or 0.1% after touching a high of 4150.45. The CNX Midcap Index was up 0.1% and S&P CNX 500 Index was down 0.1%. On BSE, advances led declines 1.2:1 in the morning session. HPCL, up 2% at Rs 295, was the top Nifty gainer on hopes the government may hike automobile fuel prices following conclusion of elections in Uttar Pradesh. BPCL was up 1.6% at Rs 372. MTNL, up 2% at Rs 157, was the other major Nifty gainer. Shares of metal companies were down as copper and nickel prices fell Monday on the LME. Sterlite Industries was down 1.5% at Rs 554. Suzlon Energy plunged 6% to Rs 1,173 after the company reported 3.4% on year decline in consolidated net profit for Jan- Mar quarter at Rs 3.6 bn. Voltas was up 2% at Rs 99 after the company reported Jan-Mar net profit of Rs 1.2 bn, up over 4 times from the year ago period. In the mid trading session, indices were down 0.6% on profit booking following weakness in Asian markets. Investors were cautious as a 3.5% fall in the Chinese share market today revived memories of a global sell-off in February, At around 12.50PM, Sensex was at 13910.92, down 54.94 points, or 0.4%. Nifty was at 4107.60, down 26.70, or 0.7%. Suzlon Energy, down 7% at Rs 1,168, was the worst hit on Nifty after consolidated net profit for Jan-Mar fell 3.4% from a year ago. BHEL was up 2% at Rs 546 as the company plans to enhance its manufacturing capacity to 15,000 MW a year with total investment of around Rs 32 bn. Thermax was down 3% at Rs 401 on reports Philadelphia-based water-treatment company Purolite has sued it for allegedly stealing intellectual property. Varun Shipping was 0.4% at Rs 54.60. The company acquired second 16000 BHP AHTSV. Lupin was up 2.1% at Rs 722. The company received USFDA approval for Simvastatin tablets. HOEC slipped 6% at Rs 91 on bad Q4 results. The company reported Net loss of Rs 9.82 crore vs loss of Rs 13.8 crore last year. Net sales stood at Rs 24.9 crore versus Rs 30 crore. Satyam was down 1.6% at Rs 454 on stronger rupee. Its BPO arm Nipuna has entered into an alliance with Phoenix Marketing International, one of the fastest growing marketing services firms in the United States, to launch a cost-effective, highly predictive modeling methodology - Customer Intelligence Program (CIP). Pyramid Saimira was up 0.8% at Rs 336. The company entered into a commercial arrangement with Vision Media Group (VMG) to acquire and distribute about 10 to 12 films from VMG. No. of Scrips Value (Crs.) Advances 694 7007 Declines 367 2142 Unchanged 26 16 Total 1087 9165 Key share indices ended down 0.3% as shares of technology companies extended losses for the second straight session due to a rising rupee. The session was volatile due to uncertain market direction. Key shares were also weighed down by weakness in overseas markets. Chinese market ended down 3.5% today on fears regulators would move in to cool the heated market. On Feb 27, the Chinese stock market fell 9% on fears its government may take measures to cool off equity markets. The fall in China triggered a sell-off in other markets across the world, including India. Sensex ended at 13929.33, down 36.53 points or 0.3% from Monday. Intraday it moved between 13885.46 and 14023.86. Nifty ended at 4120.30, down 14.00 points or 0.3%. Intraday it moved between 4102.45 and 4150.45. Turnover on both the exchanges was roughly Rs 132.3 bn, compared to Rs 126 bn Monday. The CNX Midcap Index was up 0.6% and S&P CNX 500 Index ended down 0.1%. HPCL, up 5% at Rs 302, was the top Nifty gainer on hopes the government may hike automobile fuel prices following conclusion of elections in Uttar Pradesh. BPCL rose 3% to Rs 376. BHEL was up 3% at Rs 2,523 as the company plans to enhance its manufacturing capacity to 15,000 MW a year with total investment of around Rs 32 bn. Sterlite Industries, which was down 1.5% earlier in the session, recouped losses and ended up 2% at Rs 575. SBI was up 1.8% at Rs 1,227. The Lok Sabha today passed a bill that will allow its seven associate banks to raise their authorized capital to Rs 5 bn, and make a provision for the parent bank to cut its minimum holding in these banks to 51% from the current 55%. Lupin gained 1% at Rs 716 on approval in the US for its abbreviated new drug application for Simvastatin tablets used for treatment of high cholesterol. Shringar Cement surged 20% to Rs 65 ahead of it Jan- Mar earnings and on talk of private placement at 8-10% premium to current market price. Suzlon Energy shares tumbled 9% to Rs 1,141 after its net profit for Jan-Mar quarter fell 3.4% on year to Rs 3.6 bn due to appreciation in the rupee. The rupee has risen more than 8% against the U.S. dollar so far in 2007.Technology shares fell on the strong rupee. Satyam Computer Services ended down 2% at Rs 453 and Wipro was down 1.7% at Rs 535. ONGC ended down 2% at Rs 889. The government today said the panel to select chairman and managing director of ONGC would meet shortly. GACL ended down 0.2% at Rs 123.5. Ambuja Cements changed hands in two block deals on BSE. of 1.74 mn shares. Reliance Industries ended down 1.3% at Rs 1,599 despite news the company has discovered gas in D6 Block in offshore Krishna Godavari basin. Tech stocks ended down. Infosys was down at Rs 1973.45 with volumes of Rs 215.28 crs, TCS was down at Rs 1238.05 with volumes of Rs 129.53 crs, Rolta was up at Rs 440.60 with volumes of Rs 90.10 crs, and Wipro closed down at Rs 535.05 with volumes of Rs 83.47 crs. Pharma stocks witnessed positive trend with exception. Dr Reddy was down at Rs 658.25 with volumes of Rs 104.86 crs, Cipla closed up at Rs 211 with volumes of Rs 40.37 crs, Ranbaxy was up at Rs 395.40 with volumes of Rs 37.54 crs, and Orchid Chemical closed up at Rs 274 with volumes of Rs 24.08 crs. Banking stocks showed buying opportunity. In the Public Sector banks SBI closed up at Rs 1227.45 with volumes Rs 269.21 crs & Bank Of India closed up at Rs 204.40 with volumes Rs 80.03 crs. In the private sector ICICI Bank closed up at Rs 886.85 with volume of Rs 151.77 crs & HDFC Bank closed up at Rs 1011.05 with volumes of Rs 55.24 crs. Auto Stocks ended negative. M&M closed down at Rs 716.25 with volumes of Rs.59.61 crs & Tata Motors closed down at Rs 714.35 with volumes of Rs 46.74 crs. While in the 2 wheeler segment stocks, Bajaj Auto closed down at Rs 2635.70 with volumes of Rs 78.02 crs & Hero Honda closed down at Rs 697.60 with volumes of Rs 14.04 crs. Cement Stocks witnessed mixed trend. GACL closed up at Rs 123.40 with volumes of Rs 61.49 crs, ACC closed up at Rs 875.80 with volumes of Rs 41.34 crs, India Cement closed down at Rs 183 with volumes of Rs 39.23 crs and Birla Jute closed down at Rs 233.75 with volumes of Rs 1.11 crs. Nifty ended at 4120 down by 14 points.
Market Close: Biggies get into action again !
Started in green then went on to trade volatile and ranged before closing really strong. The morning session was choppy with no triggers from the global markets. But Indices rallied in the later part of the day as buying in index heavyweights propelled the Sensex to traded almost 200 points up. State Bank of India continued its upward journey after changes in regulatory framework to merge its subsidiaries were made in Bank?s favor. Buying was also witnessed across Automobiles, Engineering and cement counters along with small and mid caps. Appreciating Rupee had its impact on the IT counter which was the weak spot in an otherwise strong market. Global markets had mixed session with Asian Market managing a positive close while Europe was mixed after a red start.
Sensex closed higher by 198 points at 14127.31. It was helped up by gains in SBI (1284.45,+5 percent), ICICI Bk (919.1,+4 percent), RCVL (490.75,+3 percent), BHEL (2595,+3 percent) and Tata Motors (734.9,+3 percent). Restricting the gains were Hero Honda (678.3,-3 percent), Infosys (1951.65,-1 percent), TCS (1224.4,-1 percent), Cipla (209.8,-1 percent) and TISCO (588.45,-1 percent).
United Spirits acquired Whyte & Mackay for Rs.4,900 cr (595 million pounds). The installed capacity of the latest acquisition is to manufacture 4 cr litres of alcohol per year. The sales numbers of the Scottish company in the previous year was 6.6 cr cases in the previous year. The manufacturing plants of the Scottish company is located at 4 locations across Scotland. The results of the company for the fiscal were encouraging. The top line of the company grew by 32% YoY. The EBIDTA for the year stood at Rs.491 cr up by 90% from Rs.259 cr. The growth in volume terms was by 12% at 6.15 cr cases against 5.16 cr cases previous year. The Bagpiper whisky clocked sales numbers of 1.37 cr cases while the McDowell.s No.1 brand grew by 32% at 2.28 cr cases. With this acquisition the consolidated sales of the company would stand at 7.5 cr million cases per annum in volume terms. W&M has brands liked Whyte & Mackay Scotch Whiskey, Highland Malt, Isle of Juara Malt Whiskey, Glayva Liquer and Dalmore Single Highland Malt, John Barr, Mackinlays, Cluny and Claymore. With the latest acquisition the missing link of Scotch in the product portfolio of the company is complete. United Spirits stands to gain from the internationally recognized brands of the Scottish company along with a will established international marketing network. The price however certainly is high. Only time will tell whether United Spirits will be able to milk this acquisition. Its a big one.
Hindustan Construction Company (HCC) rallied to end higher by 3% after it bagged an order worth Rs.735 cr from Andhra Pradesh Govt. The current order book of the company stands at Rs.9,500 cr. Out of the total order book 88% of the orders is contributed by Power and Transportation segment. The company had formed a joint venture with Coastal Projects Pvt Ltd to bid for the project, floated by the Andhra Pradesh Irrigation Department. The share of the company in the joint venture would be of 60%.
Cera Sanitryware Ltd ended 10% higher after it reported its results. The top line for the quarter improved by 33% YoY. The EBIDTA for the year stood at 17.7% for the year. The bottom line surged by 57% at Rs.9.3 cr. The top line for the quarter improved by 41% at Rs.37 cr. The EBIDTA for the margins for the quarter were at 17.6%. The bottom line for the quarter improved by 18% at Rs.2.5cr. Expect a research note from us on this one. We have been the few research houses which has worked on this company.
Tata Tele services ended 4% lower after the company reported a loss of Rs.46 cr. The loss of the company was reduced by 70% on yearly comparison. The loss figures for the previous year stood at Rs.152 cr. The top line of the company improved by 24% at Rs.3,804 cr against Rs.3071 cr previous year. Company continues to add 1 lakh new customers every month while the other player in the country like Reliance are increasing their subscribers by almost a million every month. Valuation gap remains high.. and expectations of a turnaround were not met and that had the stock down.
Technically Speaking: Sensex was strong between an intra day high of 14,159 and low of 13,937. The breadth was in favor of Advances as Advances beat declines in ratio of 2:1. The volume for the day was at Rs.5,151 cr. The resistance is at 14,190-14,275 levels while the support lies at 14,000-14,030 levels. As expected market moves out of the 2 day range. It is headed towards a target of 14500.
198-point surge takes Sensex to 3-week high
A rally in interest-rate-sensitive banking, auto and real-estate shares, telecom stocks and index heavyweight Reliance Industries (RIL) boosted the market in a volatile trading session.
The BSE 30-share Sensex’s surge materialised in the last one hour of trading. Earlier, the market was volatile till mid-afternoon trade. After a strong debut on higher Asian markets, the Sensex had pared gains shortly, before recovering again in mid-morning trade. It came off higher level in the afternoon trade, when the Sensex wiped out almost its entire gains. The market once again bounced back from the lower level in mid-afternoon trade.
The Sensex vaulted 197.98 points, or 1.4%, to settle at 14,127.31, its highest closing in about three weeks since 26 April 2007. The Sensex moved 222.48 points between a low of 13,936.88 and high of 14,159.36.
The S&P CNX Nifty advanced 50.65 points, or 1.23%, to 4170.95. Nifty May 2007 futures provisionally ended at 4,195.35, at a premium of 24.40 points over spot price. On Tuesday, 15 May 2007, the Nifty had settled at 10 points premium over spot price.
The market breadth was strong and select side counters spurted: 1,626 shares rose on BSE as compared to 987 shares that declined, while 66 shares were unchanged. Gainers outpaced losers by a ratio of 1.64:1.
BSE clocked a turnover of Rs 5151 crore compared to average daily turnover of Rs 4290 crore in the first nine trading sessions of this month (from 3 to 15 May 2007). The average daily turnover was Rs 3931 crore in April 2007.
All the sectoral indices on BSE barring IT clocked gains today. The banking sector index, Bankex, was the top gainer in percentage terms. It rose 222.32 points, or 3%, to settle at 7,413.32. Rally in PSU banks and recovery in ICICI Bank have boosted Bankex over the past few days. From a recent low of 6752.64 on 8 May 2007, it had risen 660.68 points, or 9.7%, in a short span.
The BSE Oil & Gas index gained 110.78 points, or 1.5%, to settle at 7,401.56, led by gains in Reliance Industries (RIL). The BSE Capital Goods index rose 148.87 points, or 1.5%, to 10,082.93, led by gains in L&T and Bhel. The BSE FMCG index advanced 20.96 points, or 1.15%, to 1,838.68.
The BSE IT sector lost 26.12 points, or 0.5%, to 4,847.07 on rupee’s rise versus the US dollar. IT stocks were also hit by reports that two US Senators had claimed that Indian IT firms were misusing the H-1B visa programme.
Both the Small-Cap Index and Mid-Cap indices, which have been in recovery mode since early last month, extended gains. The Small-Cap Index rose 103.08 points, or 1.45%, to 7,205.96, and the Mid-Cap index advanced 85.98 points, or 1.44%, to 6,041.33.
European shares, though subdued, rebounded from their lows. Key benchmark indices in London, Germany and France were down by between 0.1% to 0.3% compared to the early fall of 0.4% to 0.5%. In Asia, Chinese shares recovered from Tuesday’s (15 May 2007) sharp fall. The Shanghai Composite ended 2.2% higher. Other Asian markets were also in the green but the gains were muted.
In recent days, a spate of merger and acquisition activity as well as increasingly eye-popping takeover bids have helped propel many global indices to record highs. However, the sharp and swift surge has raised concerns of a steep correction.
A strong rebound on the domestic bourses had materialised last month as the initial Q4 March 2007 results were strong and Infosys issued a strong guidance for FY 2008 on 13 April 2007. From 12,455.37 on 2 April 2007, the Sensex had surged 1,773.51 points (14.2%) to 14,228.88 on 26 April 2007. It has since then turned volatile.
In today’s trade, State Bank of India (SBI) jumped 5% to Rs 1288. The stock gained for the second day in a row today, 16 May 2007. The Lok Sabha, on Tuesday, 15 May 2007, passed the State Bank of India (Subsidiary Bank Laws) Amendment Bill, 2006. The amendment bill will allow SBI to reduce its stake in subsidiary banks to 51%, from the existing 55%.
Select other PSU banks surged. Dena Bank jumped 11.9% to Rs 45, UCO Bank 8% to Rs 25.40, Oriental Bank of Commerce 7.5% to Rs 223, Bank of Maharashtra 5.8% to Rs 47 and Andhra Bank 3.6% to Rs 91.90.
ICICI Bank was up almost 4% to Rs 921. The private sector bank on Tuesday, 15 May 2007, filed a draft prospectus with Sebi to seek approval for raising Rs 17,500 crore through an equity issue in the domestic and overseas market.
HDFC Bank rose almost 2% to Rs 1030.30. Two large block deals were executed in the stock on two exchanges NSE and BSE: A block deal of 15.5 lakh shares at Rs 1,019.80 on NSE and another large block deal of 15.35 lakh shares at Rs 1,014 on BSE.
RIL rose 2.2% to Rs 1634.40, a lifetime closing high. The company said on Tuesday, 15 May 2007, it had made two gas discoveries in separate blocks off the east and west coasts of the country. The commerciality of the above discoveries is currently under evaluation.
Tata Motors gained almost 3% to Rs 734.60, ahead of its Q4 results. It unveils Q4 March 2007 results on Friday, 18 May 2007.
Bajaj Auto advanced nearly 2% to Rs 2686 ahead its board meet on Thursday, 17 May 2007,to consider proposal to split the company into two and Q4 March 2007 results
L&T gained 2.2% to Rs 1711 after announcing today, 16 May 2007, that it would unveil its Q4 March 2007 results on 29 May 2007.
United Spirits gained almost 8% to Rs 904 after the UB group company said it had acquired Scottish spirits maker Whyte & Mackay for 595 million pound sterling.
Real estate stocks rose on renewed speculative buying. Peninsula Land jumped 15.7% to Rs 443, Ansal Infrastructure rose 10.7% to Rs 355, Unitech gained almost 10% to Rs 534.40, Parsvnath Developers rose 7% to Rs 332, Mahindra Gesco Developers rose 6.8% to Rs 635, and Sobha Developers gained 5% to Rs 911. Most of these stocks have the entered futures & options segment from 14 May 2007.
Alfa Laval India spurted 16% to Rs 1125 after Swedish engineering group Alfa Laval said today, 16 May 2007, it was raising its bid for the outstanding shares in its Indian subsidiary. Alfa Laval raised its public offer to Rs 1,300 per Alfa Laval India share from the initial offer of Rs 875. The Swedish firm owns 64% of Alfa Laval India. Alfa Laval repeated it intended to raise its stake to 90%.
Bajaj Electricals jumped 20% to Rs 503.60 after scheduling a board meet on 29 May 2007 to consider a bonus issue.
A host of media shares were in demand. UTV Software Communications jumped 20% to Rs 405. A block deal of 1.31 lakh shares was executed in the stock at Rs 405 on BSE. In addition to UTV Motion Pictures, UTV Software Communications has reportedly launched a second brand, Spotboy Motion Pictures, in the motion pictures space.
Balaji Telefilms advanced 9.5% to Rs 194.70 ahead of its Q4 Mach 2007 results scheduled today, 16 May 2007. The stock had seen a solid pre-results rally on expectations of good Q4 numbers.
But Shringar Cinema flopped almost 10% to Rs 59 even as it reported turnaround results after trading hours on Tuesday, 15 May 2007.
Motherson Sumi Systems gained 1.8% to Rs 109 after it said on Tuesday, 15 May 2007, it bought the business and assets of Australia's Empire Rubber. The buyout of the rubber extruded components maker would yield revenue of Australian dollar 35 million annually.
Micro Technologies dropped 1.5% to Rs 254 after the company said today, 16 May 2007, its board had approved raising up to $20 million through qualified institutional placement, convertible bonds or depositary receipts. The board also approved allowing foreign institutional investors to invest in up to 49% of the company's paid-up equity share capital.
Glenmark Pharmaceuticals rose almost 3% to Rs 644.50 after the company said today, 16 May 2007, it had approval from the US Food and Drug Administration to sell pravastatin sodium oral tablets, which it said was a generic version of Bristol Myers Squibb Co.'s brand Pravachol. Pravachol has annual sales of over $861 million.
Oil marketing firms lost ground after after Petroleum and Natural Gas Minister Murli Deora said on Tuesday, 15 May 2007, there was no immediate plan to raise domestic retail prices of petroleum products. HPCL lost 2% to Rs 296.05 and BPCL shed 0.8% to Rs 371. But Indian Oil Corporation rose nearly 3% to Rs 493.
Agro Tech Foods jumped 8.7% to Rs 107.10. It rose for the second day in a row after it had reported strong Q4 results after trading hours on Monday, 14 May 2007. Agro Tech Foods reported an 87.50% growth in net profit to Rs 7.50 crore in Q4 March 2007.
Tata Teleservices Maharashtra lost almost 5% to Rs 27.15 after the National Stock Exchange (NSE) banned taking fresh positions in its derivative contracts as they had crossed the 95% market-wide position limit.
Metallurgical coke producer Gujarat NRE Coke jumped almost 5% to Rs 49.40 after its unit acquired a coking coal mine in Australia for $41 million.
Over the next few months, the progress of the June-September monsoon will hold the key to the direction of the domestic bourses. The Indian meteorological department on Monday, 14 May 2007, forecast annual monsoon rains would arrive in Kerala on 24 May 2007. The weather office said last month that this year's monsoon rains were likely to be 95% of the long-term average, with a 5% margin of error. The annual monsoon is vital for India's economic health as it provides the main source of water for agriculture, which generates more than a fifth of gross domestic product (GDP).
Some important March 2007 quarter results are scheduled this week and the market will take its cue from these results. Bajaj Auto and Tata Steel report Q4 results on Thursday, 17 May 2007. The board of Bajaj Auto will also consider proposal to split the company into two. Tata Motors and Dr Reddy’s Laboratories unveil Q4 results on Friday, 18 May 2007.
Sensex ends buoyant above 14100
The market reported a solid performance on the back of strong all-round buying even as the major Asian indices exhibited a subdued trend in morning trades. Shrugging off the global cues the market opened with a gap of 21 points at 13950. The market was range-bound, but stayed above the 14000 mark in the mid morning trades. As trading progressed, the index lost ground by the afternoon and touched the day's low of 13937, up eight points from yesterday's close. The eruption of buying towards the close in heavyweights, banking and public sector stocks lifted the Sensex to touch the intra-day high of 14159 and closed the session at 14127, up 198 points. The Nifty ended the session at 4171, up 51 points.
The breadth of the market was positive. Of the 2,679 stocks that traded on the BSE, 1,626 stocks advanced, 987 stocks declined and 66 stocks ended unchanged. Among the sectoral indices the BSE Bankex notched up gains of 3.09% at 7413 followed by the BSE PSU index (up 1.55% at 6653), the BSE Oil & Gas index (up 1.52% at 7402) and the BSE CG index (up 1.50% at 10083).
The heavyweights witnessed strong buying interest. In the banking space, SBI soared 4.71% at Rs1,284, ICICI Bank rose 3.61% at Rs919 and HDFC Bank was up 2.02% at Rs1,031. Among the other major gainers Reliance Communication shot up by 3.25% at Rs491, BHEL jumped 3.02% at Rs2,595, Tata Motors added 2.84% at Rs735, Hindalco gained 2.51% at Rs149, Reliance Industries moved up by 2.29% at Rs1,634 and L&T was up 2.29% at Rs1,712. However, Hero Honda slipped 2.79% at Rs678, Infosys lost 1.06% at Rs1,952 and TCS was down 0.99% at Rs1,224.
Banking stocks notched up significant gains during the day. Oriental Bank surged 6.32% at Rs220, Andhra Bank scaled up 3.67% at Rs92, Union Bank rose 2.86% at Rs122, Canara Bank jumped 2.59% at Rs243, Kotak Bank added 2.54% at Rs552, Fedral Bank gained 1.89% at Rs269 and Punjab National Bank was up 1.80% at Rs557.
Over 2.43 crore Reliance Natural Resources shares changed hands on the BSE followed by Nagajuna Fertilizers (1.05 crore shares), Tata Teliservices (95.78 lakh shares), IFCI (65.67 lakh shares) and Petronet LNG (65.64 lakh shares).
Value-wise Unitech registered a turnover of Rs225 crore on the BSE followed by HDFC Bank (Rs167 crore), SBI (Rs153 crore), Reliance Industries (Rs125 crore) and Orbit Corporation (Rs104 crore).
Poweryourtrade.com Trading Calls
Ashwani Gujral
Buy Pantaloon Retail with stop loss of Rs 400 for a target of Rs 530
Buy Moser Baer with stop loss of Rs 360 for a target of Rs 510
Rajat K Bose
Buy Moser Baer with stop loss below Rs 394 for a target of Rs 424. This is a day-trading recommendation.
Sell Tata Tele(M) with stop loss above Rs 29.75 for a target of Rs 27.80, 26.90 and 26.55. This is a day-trading recommendation.
Deepak Mohoni
Buy Moser Baer below Rs 308 with stop loss at Rs 300. This is a day-trading recommendation.
Short sell Suzlon Energy above Rs 1140 with stop loss at Rs 1160. This is a day-trading recommendation.
STRATEGY INPUTS FOR THE DAY
Dull times, concentrate
Life is dull only to dull people
Dare we say it may well just be another dull day on the bourses. With nothing to play on at the moment, the market will remain directionless and will witness more intra-day swings. Unless you are trading on the Nifty leave the broad direction aside and concentrate on counters you wish to buy . We expect the sideways movement to continue for a while before any fresh triggers emerge. There will be more churning of portfolios as investors look for more gains. The action will continue to be stock specific and news based.
Global factors will remain one of the key drivers of the sentiment. Investors should do well to avoid fresh buying at this juncture as the bulls clearly lack conviction . Still, if the market has to make a decisive movement in any direction, it may well be down first and then an up move. We expect the market to open on a cautious note today amid lack of clear indications from the global markets. The key stock benchmarks may just end on a flattish note yet again.
FIIs were net sellers of Rs2.84bn (provisional) in the cash segment yesterday. Local institutions too offloaded shares worth Rs599mn. In the F&O segment, they were net sellers of Rs1.13bn.
United Spirits will be in focus amid reports that Vijay Mallya is likely to announce the acquisition of Whyte & Mackay today. Wockhardt could be under pressure after Abbott Laboratories sued the Indian drug major to block regulatory approval of a generic version of the company's epilepsy treatment Depakote ER.
SBI and its three listed subsidiaries will hog the limelight after the Lok Sabha cleared a bill that will lend greater autonomy to SBI's seven subsidiaries. IT companies, already reeling under the steep appreciation in the rupee, may be hit further amid reports that two US senators have sent notices to lal big software firms on the alleged violation of the H-1B visa norms.
On Wall Street, the Dow Jones Industrial Average rose 37 points to 13,383.84, ending at a new record. The blue-chip barometer briefly hit an intraday mark of 13, 481.60 before retracing a bit.
The broader S&P 500 index finished almost flat at 1,501.19, after hitting a fresh six-year high during the session that set it within 15 points of its all-time high from March 2000.
The tech-fueled Nasdaq Composite was down 21 points at 2,525.29, limited by weakness in Amgen and a number of chip and Internet stocks.
Stocks were up through the early afternoon session as investors focused on a mild reading on inflation. However, the rally lost steam in the afternoon owing to a report showing further weakness in home building ahead of Wednesday's housing market report.
The Consumer Price Index (CPI) rose 0.4% in April, short of expectations. The so-called Core CPI, which excludes the volatile food and energy prices, rose 0.2%, as expected.
US light crude oil for June delivery rose 71 cents to settle at $63.17 a barrel on the New York Mercantile Exchange. The front-month contract was quoting 6 cents lower at $63.11 a barrel in extended trading in Asia.
COMEX gold for June delivery rose $4.40 to settle at $674.50 an ounce. Treasury prices slipped, pushing the yield on the 10-year note to 4.7%, up from 4.69% late on Monday. In currency trading, the dollar slipped against the euro and was little changed against the yen.
European shares closed higher. The pan-European Dow Jones Stoxx 600 index rose 0.1% to 389.17. The UK's FTSE 100 closed up 0.2% at 6,568.60, the German DAX Xetra 30 advanced 0.6% to 7,505.35 and the French CAC-40 added 0.4% to 6,049.76.
In the emerging markets, the Ibovespa in Brazil ended flat at 50,518 while the IPC index in Mexico lost 0.5% at 29,619 and the RTS index in Russia slumped 1.3% to 1826.
In Asia this morning, the Nikkei was down 40 points at 17,472 while the Hang Seng in Hong Kong advanced 45 points to 20,913. The Kospi in Seoul added 3 points at 1592 and the Straits Times in Singapore was flat at 3473.
A sluggish session ended almost on a flat note as lack of support from the Asian markets and selling pressure dragged the key indices to close in negative terrain. Techies continued to be on the receiving end and Sugar stocks also were battered. However Banking and Select FMCG stocks aided support to the markets. Media stocks were the star performers. Suzlon lost over 9% on back of lower than expected Q4 result. Finally, the 30-share benchmark Sensex dropped 36 points to close at 13929. NSE Nifty was down 14 points to close at 4120.
SBI gained by 1.8% to Rs1227 after Finance Minister announced that the Government would take control of the Bank by August. The scrip touched intra-day high of Rs1241 and a low of Rs1200 and recorded volumes of over 22,00,000 shares on NSE.
Suzlon Energy plunged by over 9% to Rs1137 after the company announced its Q4 result which were lower than market expectation�s. The company�s Q4 net profit was at Rs4.37bn (up 21%) and sales at Rs20.97% (up 33%). The scrip touched intra-day high of Rs1254 and a low of Rs1125 and recorded volumes of over 18,00,000 shares on NSE.
Havells India surged nearly by 5% to Rs498 after the company announced that they would pay dividend of Rs2.5 per share. The scrip touched intra-day high of Rs505 and a low of Rs477 and recorded volumes of over 3,00,000 shares on NSE.
Infotech Enterprises dropped 2.7% to Rs350. The company announced its strategic move to address Geospatial business opportunities in India and the Middle East by taking majority stake in Hyderabad-based Geospatial Integrated Solution Pvt Ltd. The scrip touched intra-day high of Rs362 and a low of Rs343 and recorded volumes of over 52,000 shares on NSE.
HDFC edged lower by 0.3% to Rs1671. The Company announced that it would buyout Chubb global stake in General Insurance venture. The scrip touched intra-day high of Rs1708 and a low of Rs1652 and recorded volumes of over 3,00,000 shares on NSE.
Banking stocks recorded smart gains led by gains in the index heavy weight ICICI Bank, the scrip was up by 2% to Rs887, SBI gained 1.8% to Rs1228, HDFC Bank advanced 1.4% to Rs1010 and Corp Bank added 1.3% to Rs318.
The media stocks put on a good show. Scrip�s like Raj TV was locked at 20% upper circuit to Rs226.40, WWIL spurred by over 5.5% to Rs73, Broadcast initiatives rose over 6% to Rs77 and Adlabs added 5.8% to Rs504.
Sugar stocks witnessed some profit booking after rallying for last couple of trading session. Renuka Sugar declined over 6% to Rs535, Sakhti Sugar was down 4.3% to Rs93, Balrampur Chini dropped by over 5.5% to Rs70 and Bajaj Hindusthan lost 5.8% to Rs167.
Insider Trades:
3i Infotech Limited: Shivanand R. Shettigar, General Manager & Company Secretary has sold in open market 2000 equity shares of 3i Infotech Limited on 10th May, 2007
Dena Bank: UBS Securities Asia Limited A/c. Swiss Finance Corporation (Mauritius) Ltd. has purchased from open market 2000000 equity shares of Dena Bank on 10th and 14th May, 2007
BSE Oil & Gas index was the major loser and lost 0.87%. BSE Technology index (down 0.69%), BSE Capital Good index (down 0.49%), BSE Auto index (down 0.48%) and Consumer Durable index (down 0.28%) were among the other major losers. However, BSE Bank index gained 1.65%.
Volume Toppers:
RNRL, IFCI, Petronet LNG, Idea, SAIL, FSL, WWIL, IB Real Estate, R Com, Indian Hotels, Bank of India, Cinemax, DCB, Arvind Mills, Broadcast Initiatives, Dena Bank and Dish TV
Upper Circuit:
Pratibha Industries, Ambalal Sarabai, UFlex, Shringar Cinemas, AMD Metplast, Bartronics, Thomas Cook, Tera Software, Mefcom Agro, Sujana Metal, Fortis, Flawless Diamond, Vyapar Industries, Raj Tele and Mercator Lines.
3i Infotech Limited: Shivanand R. Shettigar, General Manager & Company Secretary has sold in open market 2000 equity shares of 3i Infotech Limited on 10th May, 2007
Dena Bank: UBS Securities Asia Limited A/c. Swiss Finance Corporation (Mauritius) Ltd. has purchased from open market 2000000 equity shares of Dena Bank on 10th and 14th May, 2007
BSE Oil & Gas index was the major loser and lost 0.87%. BSE Technology index (down 0.69%), BSE Capital Good index (down 0.49%), BSE Auto index (down 0.48%) and Consumer Durable index (down 0.28%) were among the other major losers. However, BSE Bank index gained 1.65%.
Volume Toppers:
RNRL, IFCI, Petronet LNG, Idea, SAIL, FSL, WWIL, IB Real Estate, R Com, Indian Hotels, Bank of India, Cinemax, DCB, Arvind Mills, Broadcast Initiatives, Dena Bank and Dish TV
Upper Circuit:
Pratibha Industries, Ambalal Sarabai, UFlex, Shringar Cinemas, AMD Metplast, Bartronics, Thomas Cook, Tera Software, Mefcom Agro, Sujana Metal, Fortis, Flawless Diamond, Vyapar Industries, Raj Tele and Mercator Lines.
Delivery Delight:
Bharat Forge, BHEL, BPCL, Century Textiles, Gujarat Alkalies, Gujarat State Fertilizers, ICICI Bank and Indian Hotels.
Bharat Forge, BHEL, BPCL, Century Textiles, Gujarat Alkalies, Gujarat State Fertilizers, ICICI Bank and Indian Hotels.
Abnormal Delivery:
LIC Housing Finance Ltd, Federal Bank, ONGC, Electrosteel Castings, Thermax, Bajaj Auto, Tata Chemicals and Tata Power.
LIC Housing Finance Ltd, Federal Bank, ONGC, Electrosteel Castings, Thermax, Bajaj Auto, Tata Chemicals and Tata Power.
Stock Futures with largest increases in OI:
Financial Technologies, Moser Baer, Pantaloon, Petronet LNG, Kesoram Industries, Educomp and Adlabs Film.
Financial Technologies, Moser Baer, Pantaloon, Petronet LNG, Kesoram Industries, Educomp and Adlabs Film.
Stock Futures with largest decreases in OI:
Nagarjuna Fertilizer, LIC Housing, Renuka Sugar, Voltas, BEML, Arvind Mills, HLL and Cipla.
Nagarjuna Fertilizer, LIC Housing, Renuka Sugar, Voltas, BEML, Arvind Mills, HLL and Cipla.
Results Today:
Balaji Telefilms, Bongaigaon Refinery, Indo Rama Synthetics, JK Lakshmi Cement, D-Link, ICI India, JB Chemicals, Bharat Gears, Shanthi Gears and Entertainment Network India.
Balaji Telefilms, Bongaigaon Refinery, Indo Rama Synthetics, JK Lakshmi Cement, D-Link, ICI India, JB Chemicals, Bharat Gears, Shanthi Gears and Entertainment Network India.
Results Corner:
Suzlon Energy net profit at Rs4.37bn (up 21%), sales at Rs20.97% (up 33%)
Suzlon Energy net profit at Rs4.37bn (up 21%), sales at Rs20.97% (up 33%)
Brokers Recommendations:
BHEL - Buy from CLSA with target of Rs2950
BHEL - Buy from CLSA with target of Rs2950
Avaya Global - Buy from Emkay with target of Rs358
Reliance Capital - Buy from Merrill Lynch with target of Rs1025
Long Term investment:
HCL Tech
HCL Tech
Major News Headlines:
Govt will take control of SBI by August: FM
Lok Sabha approves amendments in SBI Subsidiary Bank Laws Amendment Bill to
Seven SBI subsidiaries can raise fresh capital
RIL makes 2 new gas discoveries
Infotech Enterprises to buy stake in Geospatial Integrated
Suzlon to spend Rs8.5bn on Hansen unit expansion
Arvind Mills in JV with Diesel Planet
Hindalco completes acquisition of Novelis
Essar Global to consider building $3.4bn oil refinery in Egypt
KS Oil to consider stock split on May 23.
Market may remain range bound
The market may move in a narrow range today tracking similar trend in Asian markets. The market had settled on a subdued note on Tuesday 15 May 2007 tracking negative cues from global markets. Sensex had lost 36.53 points or 0.26% to settle at 13,929.33.
A strong rebound on the domestic bourses had materialized, last month as the initial Q4 March 2007 results were strong and Infosys issued a strong guidance for FY 2008 on 13 April 2007. From 12,455.37 on 2 April 2007, the Sensex had surged 1,773.51 points (14.2%) to 14,228.88 on 26 April 2007. It has since then turned volatile.
Asian markets were mostly in the green on Wednesday, 16 May 2007, but their gains were muted as investors digested a mixed bag of US data. Key benchmark indices in Hong Kong, China, Singapore, South Korea and Taiwan were up by between 0.03% to 0.8%.
The Dow industrials rose to a record high close on Tuesday, 15 May 2007, as signs of stabilizing inflation raised the prospect of lower interest rates, boosting the outlook for business investment. But the Dow ended well off its highs of the day and the S&P 500 index and the Nasdaq declined as disappointing results from some retailers and a report showing US home builder confidence fell in May raised concerns about consumer spending. The Dow rose 37.06 points, or 0.28 percent, to end at 13,383.84, a record close. The Dow also hit a record intraday high of 13,481.60.
The Standard & Poor's 500 Index was down 1.96 points, or 0.13 percent, at 1,501.19. The Nasdaq Composite Index was down 21.15 points, or 0.83 percent, at 2,525.29.
Over the next few months, the progress of the June-September monsoon will hold the key to the direction of the domestic bourses. The Indian meteorological department on Monday, 14 May 2007, forecast annual monsoon rains would arrive in Kerala on 24 May 2007. The weather office said last month that this year's monsoon rains were likely to be 95% of the long-term average, with a five per cent margin of error. The annual monsoon is vital for India's economic health as it provides the main source of water for agriculture, which generates more than a fifth of gross domestic product (GDP).
Some important March 2007 quarter results are scheduled this week and the market will take its cue from these results. Bajaj Auto and Tata Steel report Q4 results on Thursday, 17 May 2007. The board of Bajaj Auto will also consider proposal to split the company into two. Tata Motors and Dr Reddy's Laboratories unveil Q4 results on Friday, 18 May 2007.
FIIs resumed buying of equities on Monday 14 May 2007 but the quantum of their inflow was small. FIIs were net buyers to the tune of Rs 60.50 crore on 14 May compared to an outflow of Rs 336.20 crore on Friday 11 May 2007. FIIs have been net buyers since last month, but there have been bouts of outflows from them since the past few days. Their outflow for May 2007, till 15 May 2007, totaled Rs 222.70 crore. FIIs had made heavy purchases in April 2007, aiding the market stage a solid rebound from lower level. Their inflow in April 2007 totaled Rs 6679.20 crore.
As per provisional data, FIIs were net sellers to the tune of Rs 284 crore on Tuesday, 15 May 2007, the day when Sensex had lost 36.53 points. Domestic institutions were net sellers to the tune of Rs 60 crore on that day.
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