India Equity Analysis, Reports, Recommendations, Stock Tips and more!
Search Now
Recommendations
Wednesday, September 12, 2007
Power Grid Subscription Details
One day before it closes, here are the Power Grid subscription details
Qualified Institutional Buyers (QIBs) - 18.4192 times
Non Institutional Investors - 0.4895 times
Retail Individual Investors (RIIs) - 1.0748 times
Are you applying ? Leave a comment, vote in the poll above !
India fastest growing healthcare IT market in Asia
India has the fastest growing healthcare IT market in Asia, with an expected growth rate of 22 per cent, followed closely by China and Vietnam, says a report. The total market for IT in the healthcare industry in Asia was $2.95 billion (Rs 12,095 crore) in 2006, and is expected to grow at a compounded annual growth rate (CAGR) of 13.1 per cent to reach $4.83 billion (around Rs 19,803 crore) by 2010, says a Springboard Research report.
Surprisingly, Australia, probably the most developed market in the region and the second largest, is the fourth fastest growing market.
Many of the more developed Asian markets such as Hong Kong, Taiwan, Singapore, and Korea had a much lower percentage of healthcare IT spending than the emerging markets, but still managed to provide high quality healthcare services to their populace, the report said.
Jonathan Silber, research manager for Springboard Research, said, "While you can see a definite split in trends and spending patterns by the developed and developing countries, even within these groups there is further fragmentation that increases the challenge for IT vendors. For example, you have a mature country such as Australia that is a larger market, yet growing faster than many of the emerging markets due to trends unique to Australia. We are seeing more unique drivers across countries, so local strategies are even more important in Asia."
The Asian emerging markets continued to invest in infrastructure for their healthcare sector, with a broader push for community care and increased care in rural areas. Huge sums of money were being spent in India and China in this regard and, as mentioned above, many of the emerging markets in Asia were spending more on healthcare as a percentage of the total IT spending than the more developed countries, the report pointed out.
According to the report, in the more developed markets, the shift from clinical to patient-focused care is driving the technology needs of healthcare providers, who continue to invest in improving efficiencies and sharing information across providers. Other drivers in many of the developed countries include increased regulations, privacy restrictions in some countries, replacement of legacy infrastructure, as well as ageing populations.
Mid-caps rally
ndices gave up early gains and ended flat to negative Wednesday. Continuing with the pattern seen over the last couple of sessions, Indian equities opened higher tracking firm global markets, but were unable to hold gains as traders sold for profits.
“People are sceptical at higher levels, especially in index stocks, but buying interest still persists. Every day a different set of stocks take turns to hold indices at higher levels, showing a distribution pattern,” said Suresh Kumar Iyer, technical analyst at Asit C Mehta Investment
Interrmediates.
Today, indices were supported by Reliance Energy (up 3.24%), Bajaj Auto (2.55%), Reliance Industries (1.34%), HDFC (0.84%), Tata Steel (0.37%) and Mahindra & Mahindra (0.17%).
Bombay Stock Exchange's Sensex closed down 37 points or 0.24 per cent at 15,505.36, making a high of 15,661.44 and low of 15,486.81 during the day.
National Stock Exchange's Nifty finished flat at 4496.85. The index traded within the band of 4490.4 and 4531.5.
“Till the Nifty crosses 4551 decisively, we will continue to see sideways movement,” Iyer said.
Selling in NTPC, ITC, ICICI Bank, Cipla, Hindalco Industries, Ambuja Cements and Larsen & Toubro kept indices in check.
However, the broader market saw a smart rally. The BSE Mid-cap Index ended up 0.2 per cent at 6,889.55 and CNX Mid-cap Index gained 0.36 per cent to 6275.4.
Market breadth on BSE showed 1,541 advances and 1,157 declines, while on NSE, 613 shares advanced and 512 declined.
Realty stocks were buzzing on reports sector heavyweight Unitech will be added to the Nifty. The BSE Realty Index was up 1.47 per cent at 7,642.34.
Unitech closed 3.11 per cent higher at Rs 262.15, Parsvnath Developers gained 1.32 per cent to Rs 319.70, HDIL rose 1.72 per cent to Rs 572.25 and DLF was up 2.82 per cent at Rs 634.8.
Reliance Capital September 2007 futures most active
Sees high turnover of Rs 3,181.78 crore
The Nifty September 2007 futures settled at 4485.10, a discount of 11.05 points as compared to spot closing of 4,496.15.
The NSE’s F&O turnover was Rs 40563.67 crore as compared to Rs compared to Rs 41739.52 crore on Tuesday, 11 September 2007.
Reliance Capital September 2007 futures settled at premium, at 1327.90, compared to the spot closing of Rs 1325. It was the most active contract with turnover of Rs 3181.78 crore.
However Reliance Industries September 2007 futures settled at discount, at 2006.50, compared to the spot closing of Rs 2012.50.
SBI September 2007 futures settled at premium, at 1633.50, compared to the spot closing of Rs 1623.60.
In the cash market, the S&P CNX Nifty was down 0.80 points or 0.02% at 4,496.15.
Market Close: IIP..Dampens sentiments..
Indian Markets have a mind of their own. Globally market were mixed which kept Indian Indices volatile. The trend on the bourses today was similar to yesterday as the market opened higher but settled down on late selling. Direction is lacking and we dont see any trigger for market in near terms. After mid sessions markets slipped in negative zone on lower that expected Industrial data. The growth drop to 7% in July. Investors preferred to play cautious on disappointing economic data. However, we believe that this sets stage for interest rate cut. Aluminum, Banking, Pharma and Software were under pressure while some stocks in the Power, Steel and Engineering sector were favored by investors. Mid cap and Small cap outperformed the front liners.
Sensex ended the day down by 37 points at 15505.36. Weighing on the Sensex were losses in NTPC (190.35,-3 percent), ITC (180,-2 percent), ICICI Bk (884.7,-2 percent), Cipla (175.25,-1 percent) and Hindalco (155.2,-1 percent). Losses were restricted by gains in Rel Energy (894.3, +4 percent), Bajaj Auto (2392.7, +3 percent), RIL (2012.95, +1 percent), HDFC (2174.05, +1 percent) and TISCO (711.3, +0 percent).
Western India Shipyard (WISL) had recently undergone a corporate debt restructuring, under which institutions had increased their shareholding to around 40% in the company from 15.34% in March 2007. Reports also said that ABG Shipyard is set to take over WISL for Rs 200 cr. ABG will get management control of WISL and the 40% stake held by financial institutions led by ICICI Bank. It's a court initiated sale as WISL has more debt in its book. The current outstanding debt is Rs 280 cr. WISL is a one of the India's largest composite ship repairer at Goa. WISL Revenues were placed at around Rs 53 cr. Assuming Rs 200 cr for the 40% stake valuations are placed at Rs 500 cr and also there is this extra 280 cr of debt giving an enterprise value of 780 cr. The ABG's Enterprise value to sales is 4.8:1. ABG has an order book of Rs 5000 cr which probably could be handled better using the facilities; this acquisition helps ABG to foot into ship repairing business and that should be a good fit. The acquisition seems strategically good for ABG. But the acquisition price is something where data is lacking to give a fair comment. Investors are really betting on the rehabilitation of WISL as the stock is in upper circuit from the day the news has come. ABG ended marginally up.
Peninsula Land Ltd has entered into an agreement for sale of 5,75,000 square feet (53,420 sq metres) land out of its proposed development at its Dawn Mills premises to Alok Infrastructure Pvt Ltd for Rs 1054 cr. After removing the Debt of Rs 372 cr as on 31/3/07 the value per share comes to Rs 145. The news provided has been minimal and nothing much can be commented on this. Peninsula Land (PLL) is known for its concept based architecture in the commercial, retail and residential sectors. Some of the company's real estate projects are Crossroads, CR2, Peninsula Corporate Park, Peninsula Technopark, Peninsula Business Park, Ashok Towers and Ashok Gardens. PLL rallied to end up by 3%.
As per reports, an apex court directed Reliance Energy (REL) to submit its financial bid for the Mumbai Trans Harbour sea link project within the span of three months. The Reliance Energy consortium, which includes Hyundai Engineering and Construction Company, would be the fourth bidder for the project where three others have already been qualified on technical grounds ahead of financial bids. Consortium led by Mukesh Ambani is the front runner. Maharashtra State Road Development Corporation (MSRDC) had earlier disqualified REL from participating in the bidding process. Mumbai Trans Harbour Link Project would provide a link between Sewri in Mumbai and Nhava in Navi Mumbai. The stock hit all time high but came off to end up by 4%.
Technically Speaking: Sensex traded in volatile manner. It made days high of 15661 and low of 15487. Sensex churned a good turnover of Rs 5362 Cr. Advances outnumbered declines in the ratio 1.4:1. Sensex is facing resistance at 15700 but we believe it is just a matter of time before we cross it and move towards our target of 16100. On the lower side supports at 15490 and 15350.
Dhanus Technologies IPO Subscription
Qualified Institutional Buyers (QIBs) - 36.1730 times
Non Institutional Investors - 26.7306 times
Retail Individual Investors (RIIs) - 18.6680 times
Employee Reservation - 1.0314 times
OVERALL - 28.47 times
Gold surge does not deter Indians
Indian retail gold buyers are stepping up their jewellery orders for the festival season, despite prices of the precious metal hovering at near 16-month highs.
Jewellers said spot gold prices of around $714 an ounce were not going to deter purchasers, with the festival of Ganesh Chaturthi starting on September 15.
"Customers have already placed a good amount of orders before the start of Ganesh Chaturthi," said Rajiv Popley, director of Popley & Sons in Mumbai, referring to upcoming birthday celebrations of the elephant-headed god of wisdom and prosperity.
He said most customers were paying half up front and were likely to complete the transactions on the day of the festival itself.
"The figure of $700 is not a deterrent for Indian buyers. I don't think it will dampen the season in any manner," Popley said.
He added prices in the local market were below 9,500 rupees ($235) per 10 grams, which was below last year's level of 10,000 rupees at the same time.
"We are still far away from that level," he said.
India's peak festival season commences with Rakhi, which celebrates the bond between a brother and sister, held at the end of August, and culminates with the festival of lights, Diwali, in November
It is traditionally considered auspicious to buy gold during these festivals.
Narendra Singh Rathore, Ahmedabad-based proprietor of Raju Bhai Kiran Jewellers, said he expected the buying trend to be good so long as the gold prices stabilised at close to $700.
"If it goes beyond $700, then it will impact the demand. It is important that it should stabilise," he said.
But a Chennai-based bullion analyst said the bullish trend in prices could stoke demand, rather than cool it.
"When the prices are going northwards, everybody will jump into the gold market," said N. Prasad. "On the contrary, there is hesitation in buying during bearish phases."
Demand for gold in India grew nearly 71 percent during the first half of the year to 387 tonnes from 227 tonnes during the same period of 2006, according to the World Gold Council.
Prasad said he saw Indian gold prices rising by 300-400 rupees during the festival season with the U.S. Federal Reserve expected to cut interest rates next week and a rise in oil prices above $78 a barrel.
But added the rise in gold prices would be in part cushioned by a strengthening rupee against the dollar.
The Indian rupee is quoting at nearly 40.5 rupees to a dollar, compared with above 45 rupees at the same time last year.
Via Reuters
Sensex drops 37pts, RIL ends above Rs 2,000
The Sensex opened with a positive gap of 66 points at 15,609, and touched a high of 15,661 in early deals. Profit-taking at higher levels limited the rally, and the index exhibited lacklustre movement for most of the trading session today.
Selling in late trades saw the index slip to a low of 15,487 - down 174 points from the day's high. The Sensex finally ended with a loss of 37 points at 15,505.
The market breadth was positive - out of 2,753 stocks traded, 1,537 advanced, 1,163 declined and 53 were unchanged today.
INDEX MOVERS...
Reliance Energy soared over 3% to Rs 888. Bajaj Auto rallied 2.5% to Rs 2,392.
Reliance moved up over 1% to Rs 2,013. HDFC was up nearly 1% at Rs 2,166.
...AND THE SHAKERS
NTPC declined nearly 3% at Rs 190. ITC dropped 2% to Rs 180, and ICICI Bank slipped 1.8% to Rs 885.
Cipla declined 1.5% to Rs 175. Hindalco, Satyam, Ambuja Cements and Larsen & Toubro were down around 1% each at Rs 155, Rs 429, Rs 142 and Rs 2,564, respectively.
VALUE & VOLUME TOPPERS
Reliance Capital topped the value chart with a turnover of Rs 209.50 crore followed by Everonn Systems (Rs 154 crore), Reliance (Rs 151.40 crore), Larsen & Toubro (Rs 142 crore) and Reliance Energy (Rs 133 crore).
Tata Teleservices led the volume chart with trades of around two crore shares followed by Nagarjuna Fertilisers (1.85 crore), Ispat Industries (1.50 crore), IFCI (1.46 crore) and Vishal Exports (1.26 crore).
Industrial growth slumps to 7.1 pc in July
Industrial production came down to 7.1 per cent in July 2007, compared to 12.4 per cent in the same period last fiscal due to poor performance of the manufacturing sector.
For April-July period, the output went up by 9.6 per cent against 10.6 per cent.
As per the quick estimates released by the government on Wednesday, manufacturing output grew by only 7.2 per cent (as against 14.3 per cent in July 2006) while electricity and mining and quarrying sector registered a growth of 7.5 and 4.9 per cent.
In the first four months of the fiscal, these sectors witnessed a growth of 10.3 per cent, 8.1 per cent and 3.1 per cent respectively.
Sensex settles a tad above 15,500
The market saw trend reversal from initial strength to end in the red. The market moved between positive and negative zone throughout the day. It first slipped in negative zone in mid-afternoon trade as data showing slower growth in industrial production raised worries about economic slowdown from a robust growth in the year ended March 2007. Turnover was high today.
The market had opened firm tracking rally in US stocks on Tuesday, 11 September 2007, bolstered by confidence the Federal Reserve will cut interest rates next week.
The BSE 30-share Sensex declined 37.41 points or 0.24% at 15,505.36. It opened higher at 15,608.50 and advanced further to hit a high of 15,661.44. It also slipped to a low of 15,486.81.
The Sensex had slipped 55.96 points at the day’s low of 15,486.81. It had gained 118.67 points at the day’s high of 15,661.44. Sensex oscillated 174.63 points in the day.
The barometer index is 363.49 points away from its all time high of 15,868.85 hit on 24 July 2007.
The S&P CNX Nifty was down 0.80 points or 0.02% at 4,496.15. The Nifty September 2007 futures settled at 4485.10, a discount of 11.05 points as compared to spot cloisng
India's industrial output rose 7.1% in July 2007 from a year earlier, sharply lower than downwardly revised annual growth of 9% in June 2007 due to slower manufacturing output, data showed on Wednesday. Manufacturing production rose 7.2% in July 2007 from a year earlier, compared with provisional annual growth of 10.6% in June 2007.
The market breadth was strong on BSE, with 1610 shares advancing as compared to 1157 that declined, while 55 remained unchanged.
The BSE Mid-Cap index was up 0.20% to 6,889.55, while the BSE Small-Cap index gained 0.51% to 8,572.35. Both these indices outperformed the Sensex. The BSE Small-Cap index struck a lifetime high of 8,634.68 earlier during the day.
The total turnover on BSE surged to Rs 5362 crore as compared to Rs 4839.55 crore on Tuesday, 11 September 2007. The NSE’s F&O turnover was Rs 40563.67 crore as compared to Rs compared to Rs 41739.52 crore on Tuesday, 11 September 2007.
Sectoral indices on BSE displayed mixed trend. The BSE Oil and Gas Index (up 0.73% at 8,321.15), BSE Auto Index (up 0.18% at 4,875.78), BSE Consumer Durables index (up 0.81% to 4,594.71), BSE Realty index (up 1.47% to 7,642.34) and BSE Metal Index (up 1.24% at 11,918.28) outperformed the Sensex.
However, the BSE PSU index (down 0.61% to 7,323.60), BSE FMCG Index (down 0.77% at 2,081.93), BSE Capital Goods Index (down 0.37% at 13,664.18), BSE Bankex (down 0.73% at 7,979.77), BSE TecK index (down 0.39% to 3,540.44), BSE Health Care Index (down 0.52% at 3,684.56), and BSE IT Index (down 0.59% at 4,443.98) were underperformers.
From 30-member Sensex pack, 23 declined while the rest of them gained.
India’s second largest power generation & distribution firm in terms of revenue Reliance Energy (REL) hit all time high of Rs 901.60 on BSE. It settled with a spurt of 3.59% to Rs 891 on high volumes of 15.02 lakh shares. As per reports, Supreme Court has allowed the company to bid for the Rs 2600 crore Mumbai sea link project. It was the top gainer from the Sensex pack.
Bajaj Auto, the country’s second largest bike manufacturer in terms of sales, rose 2.38% to Rs 2388. The company is reportedly targeting to sell 20,000 units of its recently lunched bike XCD in September 2007 and 50,000 in the month October 2007.
India’s top dedicated mortgage finance company in terms of sales HDFC rose 1.25% to Rs 2175, on sustained buying. It struck an all time high of Rs 2194.95. Analysts see significant value in HDFC’s insurance business, which could be unlocked in due course.
India’s top private sector entity by market capitalisation and oil refiner Reliance Industries advanced 1.30% to Rs 2012.20 on 7.52 lakh shares boosted by reports that government may approve Reliance Industries (RIL)'s pricing formula for the gas it plans to produce from July next year, with minor changes. The stock struck an all time high of Rs 2022.
The empowered Group of Ministers (eGoM) today left the decision on the gas price that RIL can charge its customers to External Affairs Minister Pranab Mukherjee. Mukherjee is likely to give his decision after his return from the South East Asian tour on 19 September 2007
NTPC, the nation’s largest power generation company by sales slumped 3.04% to Rs 189.80 on 15.36 lakh shares. It was the top loser from the Sensex pack.
Pharma counters slipped on profit booking. Dr Reddy’s Laboratories (down 0.95% to Rs 645), Ranbaxy Laboratories (down 0.49% to Rs 417.75), and Cipla (down 1.27% to Rs 175.45) were the losers from pharma sector.
Banking pivotals saw some unwinding. ICICI Bank (down 1.69% to Rs 886), and HDFC Bank (down 0.53% to Rs 1181.50) edged lower
Among side counters, Salora International (up 10% to Rs 187.90), IndusInd Bank (up 10.78% to Rs 63.20), Tanla Solutions (up 10% to Rs 530.90), and Gemini Communions (up 20% to Rs 264.15), surged
Gulf Oil Corporation (down 6.13% to Rs 1200), Simplex Castings (down 4.94% to Rs 80.75), and Phoenix Mills (down 4.57% to Rs 2130), slipped
Sugar shares surged on momentum buying as crude oil prices hovered near record high of over $78 a barrel. Dwarikesh Sugar (up 3.56% to Rs 56.75), Sakthi Sugar (up 3.86% to Rs 78), Triveni Engineering (up 2% to Rs 86.50), Balrampur Chini Mills (up 3.16% to Rs 65.25), Shree Renuka Sugars (up 3.13% to Rs 550.30), and Bajaj Hindustan (up 4.31% to Rs 141.15) advanced.
Peninsula Land rose 2.36% to Rs 533.10 after it struck a deal to sell 5,75,000 square feet of land at its Dawn Mills premises to Alok Infrastructure for Rs 1050 crore.
Western India Shipyard (WISL) jumped 5% to Rs 18 ahead of its board meeting to discuss ABG Shipyard’s involvement in reviving the company. Recent reports suggest that ABG Shipyard would take over WISL in a Rs 200-crore deal. ABG would get management control of the company and the 40% stake held by financial institutions led by ICICI Bank.
Kernex Microsystems India declined 2.10% to Rs 355. The company fixed 17 October 2007 as the record date for the purpose of issue of bonus issue in the ratio 1:10.
Steel Authority of India rose 1.81% to Rs 174.45 on reports of the company planning major expansion of Rs 40,000 crore. The company would achieve a capacity of 26 million tonnes by 2010 compared with its current capacity of 13.5 million tonnes.
Kinetic Engineering rose 0.72% to Rs 139. The stock surged to a high of Rs 157.90 on reports of Tata Motors selecting the company as a vendor for supply of gearboxes for its proposed Rs 1 lakh car.
Nagarjuna Fertilisers (up 6.64% to Rs 46.55) and Tata Teleservices (Maharashtra) (up 0.44% to Rs 34.60) advanced after NSE lifted ban on building fresh derivatives positions effective today, 12 September 2007.
Modern Dairies jumped 5% at Rs 158.40 ahead of its record date for issuing bonus shares. Modern Dairies has fixed 1 October 2007 as record date for issuing bonus shares, in the ratio of 1:1 (1 bonus share for every 1 equity share held). The stock had jumped 5% to Rs 150.90 yesterday, 11 September 2007
Nitco Tiles rose 2.73% to Rs 245. The stock rose for the second straight day on reports that firm has forayed into import and distribution of cement and is importing 1 million tonnes (MT) of cement from Pakistan. The stock had gained 4.05% to Rs 238.90 yesterday, 11 September 2007
3i Infotech rose 0.92% to Rs 143 after it acquired a strategic stake of 26% in Taxsmile.com India, with a commitment to acquire a majority stake over a period. Taxsmile is a company engaged in Internet-based tax filing and tax advisory space for individuals.
The trend on the bourses today was similar to yesterday, 11 September 2007, when the market had opened higher but settled with losses on late selling due to political worries ahead of a key meeting of the government with left parties.
The government held initial talks with its communist allies yesterday, 11 September 2007 over a controversial India-US nuclear deal. External Affairs Minister Pranab Mukherjee said after the 45-minute meeting that the UPA government and its Left allies set ground rules for further talks and the committee would meet again on 19 September 2007.
Most of the European markets were trading lower today, 12 September 2007. Key benchmark indices in United Kingdom (down 0.55% to 6,246.30) and Germany (down 0.37% to 7,430.46) slipped. However France’s CAC 40 rose 0.04% to 5,481.34
Asian markets settled mixed today, 12 September 2007. Hang Seng (up 1.49% at 24,310.44), Taiwan Weighted (up 0.17% at 9,018.12) and Singapore's Straits Times (up 0.33% at 3,506.09) gained.
However, South Korea's Seoul Composite (down 1.83% at 1,813.52) and Japan's Nikkei (down 0.50% at 15,797.60), slipped
The Dow Jones Industrial Average (DJIA) rose 180.54 points, or 1.38%, to 13,308.39 on Tuesday, 11 September 2007. The Standard & Poor's 500 index rose 19.79 points, or 1.36%, to 1,471.49, while the Nasdaq Composite index rose 38.36 points, or 1.50%, to 2,597.47.
Crude oil prices held near a record high over $78 a barrel on Wednesday, 12 September 2007, after OPEC's token output increase failed to soothe consumers' worries about falling inventories. US light crude for October delivery rose 8 cents to $78.31 a barrel, after a record close yesterday, 11 September 2007 of $78.23, and within striking limit of 1 August 2007’s record high of $78.77.
Meanwhile, in a move that could boost FII investments in India, the Securities and Exchange Board of India (Sebi), on Tuesday 11 September 2007, permitted acceptance of foreign sovereign securities with ‘AAA’ rating by clearing members as collateral from FIIs for exchange traded derivative transactions. Currently, collateral deposited by FIIs with the clearing members for derivative transactions is in the form of cash. RBI has already given permission for the new facility.
Market slips on weak IIP numbers
The market resumed on a positive note and rose over 118 points to touch the day's high at 15,661 in mid-morning trades. Reliance Industries and Larsen & Toubro led the rally, but caution and lack of news capped the gains as the market neared record highs. However, the Sensex fell into negative territory soon after the release of weaker-than-expected industrial production data. The industrial output in July rose to 7.1% from a year earlier, well below the forecast of 9.6%. The market remained subdued thereafter with alternate bouts of buying and selling in index pivotal stocks. Selling intensified towards the close and the market touched the day's low at 15,487. The Sensex finally closed the session at 15,505, down 37 points. The Nifty ended the session at 4,497 with a little change.
The market breadth was positive, with the gainers outpacing the losers. Of the 2,753 stocks that traded on the BSE, 1,538 stocks advanced, 1,163 stocks declined and 52 stocks ended unchanged. Most of the sectoral indices ended in the red. The BSE FMCG index dropped 0.77% at 2,082 followed by the BSE Bankex index (down 0.73% at 7,980) and the BSE PSU index (down 0.61% at 7,324). However, the BSE Realty index gained 1.47% at 7,642, the BSE Metal index (up 1.24% at 11,918) and the BSE CD index (up 0.81% at 4,595).
Among the Sensex stocks, Reliance Energy was the leading gainer and its stock price soared 3.24% at Rs888. Among other stocks, Bajaj Auto advanced 2.58% at Rs2,393, Reliance Industries jumped 1.34% at Rs2,013, while HDFC, Tata Steel, M&M, SBI and HLL closed with marginal gains. Among the laggards, NTPC slipped 2.76% at Rs190, ITC shed 2.07% at Rs180, ICICI Bank declined by 1.83% at Rs885, Cipla fell by 1.46% at Rs175 and Hindalco lost 1.21% at Rs155.
Over 2.03 crore Tata Teleservices shares changed hands on the BSE followed by Nagarjuna Fertilisers (1.85 crore shares), Ispat Industries (1.48 crore shares), IFCI (1.46 crore shares) and Vishal Exports (1.25 crore shares).
Reliance Capital registered a turnover of Rs209 crore on the BSE followed by Everonn Systems (Rs154 crore), Reliance Industries (Rs151 crore), L&T (Rs142 crore) and Reliance Energy (Rs133 crore).
Sensex sheds 39 points; RIL settles above Rs 2000
The market saw trend reversal from initial strength to end in the red. The market moved between positive and negative zone throughout the day. It first slipped in negative zone in mid-afternoon trade as data showing slower growth in industrial production raised worries about economic slowdown from a robust growth in the year ended March 2007. Turnover was high today.
The market had opened firm tracking rally in US stocks on Tuesday, 11 September 2007, bolstered by confidence the Federal Reserve will cut interest rates next week.
The BSE 30-share Sensex was down 39.01 points or 0.25% to 15,503.76, as per provisional closing. It opened higher at 15,608.50 and advanced further to hit a high of 15,661.44. It also slipped to a low of 15,486.81
The Sensex had slipped 55.96 points at the day’s low of 15,486.81. It had gained 118.67 points at the day’s high of 15,661.44.
The S&P CNX Nifty was down 0.80 points or 0.02% to 4,496.15 as per provisional closing
India's industrial output rose 7.1% in July 2007 from a year earlier, sharply lower than downwardly revised annual growth of 9% in June 2007 due to slower manufacturing output, data showed on Wednesday. Manufacturing production rose 7.2% in July 2007 from a year earlier, compared with provisional annual growth of 10.6% in June 2007.
The market breadth was strong on BSE, with 1610 shares advancing as compared to 1157 that declined, while 55 remained unchanged.
Turnover surged in last one hour on trade. It amounted to Rs 5362 crore as compared to Rs 4012 crore by 14:30 IST
From 30-member Sensex pack, 23 declined while the rest of them gained.
India’s second largest listed power utility company in terms of revenue Reliance Energy (REL) hit an all time high of Rs 901.60 on BSE. It settled with a spurt of 3.59% to Rs 891 on high volumes of 15.02 lakh shares. As per reports, Supreme Court has allowed the company to bid for the Rs 2600 crore Mumbai sea link project. It was the top gainer from the Sensex pack.
Bajaj Auto, the country’s second largest bike manufacturer in terms of sales, rose 2.38% to Rs 2388. The company is reportedly targeting to sell 20,000 units of its recently lunched bike XCD in September 2007 and 50,000 in the month October 2007.
India’s top dedicated mortgage finance company in terms of sales HDFC rose 1.25% to Rs 2175, on sustained buying. It struck an all time high of Rs 2194.95. Analysts see significant value in HDFC’s insurance business, which could be unlocked in due course.
India’s top private sector entity by market capitalisation and oil refiner Reliance Industries advanced 1.30% to Rs 2012.20 on 7.52 lakh shares boosted by reports that government may approve Reliance Industries (RIL)'s pricing formula for the gas it plans to produce from July next year, with minor changes. The stock struck an all time high of Rs 2022.
The empowered Group of Ministers (eGoM) today left the decision on the gas price that RIL can charge its customers to External Affairs Minister Pranab Mukherjee. Mukherjee is likely to give his decision after his return from the South East Asian tour on 19 September 2007
NTPC, the nation’s largest power generation company by sales slumped 3.04% to Rs 189.80 on 15.36 lakh shares. It was the top loser from the Sensex pack.
Pharma counters slipped on profit booking. Dr Reddy’s Laboratories (down 0.95% to Rs 645), Ranbaxy Laboratories (down 0.49% to Rs 417.75), and Cipla (down 1.27% to Rs 175.45) were the losers from pharma sector.
Banking pivotals saw some unwinding. ICICI Bank (down 1.69% to Rs 886), and HDFC Bank (down 0.53% to Rs 1181.50) edged lower
Among side counters, Salora International (up 10% to Rs 187.90), IndusInd Bank (up 10.78% to Rs 63.20), Tanla Solutions (up 10% to Rs 530.90), and Gemini Communions (up 20% to Rs 264.15), surged
Gulf Oil Corporation (down 6.13% to Rs 1200), Simplex Castings (down 4.94% to Rs 80.75), and Phoenix Mills (down 4.57% to Rs 2130), slipped
The trend on the bourses today was similar to yesterday, 11 September 2007, when the market had opened higher but settled with losses on late selling due to political worries ahead of a key meeting of the government with left parties.
The government held initial talks with its communist allies yesterday, 11 September 2007 over a controversial India-US nuclear deal. External Affairs Minister Pranab Mukherjee said after the 45-minute meeting that the UPA government and its Left allies set ground rules for further talks and the committee would meet again on 19 September 2007.
European markets were trading mixed today, 12 September 2007. Key benchmark indices in United Kingdom (down 0.22% to 6,267.10) and Germany (down 0.23% to 7,440.98) slipped. However France’s CAC 40 rose 0.11% to 5,485.06
Asian markets were mixed today, 12 September 2007. Hang Seng (up 1.49% at 24,310.44), Taiwan Weighted (up 0.17% at 9,018.12) and Singapore's Straits Times (up 0.33% at 3,506.09) gained.
However, South Korea's Seoul Composite (down 1.83% at 1,813.52) and Japan's Nikkei (down 0.50% at 15,797.60), slipped
The Dow Jones Industrial Average (DJIA) rose 180.54 points, or 1.38%, to 13,308.39 on Tuesday, 11 September 2007. The Standard & Poor's 500 index rose 19.79 points, or 1.36%, to 1,471.49, while the Nasdaq Composite index rose 38.36 points, or 1.50%, to 2,597.47.
Crude oil prices held near a record high over $78 a barrel on Wednesday, 12 September 2007, after OPEC's token output increase failed to soothe consumers' worries about falling inventories. US light crude for October delivery rose 8 cents to $78.31 a barrel, after a record close yesterday, 11 September 2007 of $78.23, and within striking limit of 1 August 2007’s record high of $78.77.
As per provisional data, foreign institutional investors (FIIs) purchased shares worth a net Rs 256.59 crore, while domestic institutional investors (DIIs) were net sellers of shares worth Rs 444.75 crore on Tuesday, 11 September 2007.
Meanwhile, in a move that could boost FII investments in India, the Securities and Exchange Board of India (Sebi), on Tuesday 11 September 2007, permitted acceptance of foreign sovereign securities with ‘AAA’ rating by clearing members as collateral from FIIs for exchange traded derivative transactions. Currently, collateral deposited by FIIs with the clearing members for derivative transactions is in the form of cash. RBI has already given permission for the new facility.
Morning Call
Market Grape Wine :
In House :
Nifty at a supp of 4485 and 4453 with resistance at 4527 and 4550 levels.
Intraday : Buy : Rolta above 517 with target 535 S/L 509.
Buy: Bata above 172 with target 180 S/L 169.
Intraday: F & O : Buy Tata Steel above 716.50 with target 735 S/L 709.
F & O : Buy ABirlanuvo above 1435with target 1475 S/L 1420
Delivery Buy : IFCI above 80 target 88~95
Tatasteel target 750
Out House :
Markets at a support of 15454 & 15353 levels with resistance at 15695 & 15786 levels .
Buy : REL
Buy : RIL
Buy : Tisco
Buy : Hanun & Sintex delivery bullet
Buy : IBulls & IbullsReal
Buy : JpHydro , TTML , Nagarfert & IFCI
Buy : NTPC
Buy : IFCI bullet
Dark Horse : RIL , REL, NTPC , SBIN , Hanun , Aptech , Tisco , Titan & ONGC
Grey Market - Dhanus, Power Grid, Kouton, Kaveri
Power Grid Corporation 44 to 52 14.5 to 15
Dhanus Tech. 280 to 295 90 to 95
Allied Computer 12 0
Koutons Retail 370 to 415 95 to 98
Kaveri Seeds 150 to 170 12 to 14
Indowind Energy 55 to 65 Discount
Magnum Venture 30 2 to 3
Consolidated Construction 460 to 510 NA
Pre Market Watch
Indian market is likely to have a positive opening due to favoring global cues. On Tuesday, the Indian markets ended on a negative note, as BSE Sensex closed lower by 54.06 points at 15,542.77 while Nifty slipped by 10.8 points to close at 4,497.05. We expect the market to trade higher during the trading session.
On Tuesday, the US market closed in green. The Dow Jones Industrial Average grew by 180.54 points to close at 13,308.39. The Nasdaq Composite Index grew by 38.36 points to close at 2,597.47. The S&P 500 index increased by 19.79 points to close at 1,471.49.
Indian ADRs ended in mixed. In technology sector, Satyam computers grew by (0.71%) along with Wipro by (0.36%) while Patni computers and Infosys slipped by (3.02%) and (0.32%) respectively. In banking sector, HDFC bank and ICICI bank advanced by (0.68%) and (0.32%) respectively. VSNL and MTNL grew by (3.37%) and (0.43%) respectively.
The major stock markets in Asia are trading higher. Japan''s Nikkei trading up by 56.69 points to trade at 15,934.36. Hang Seng grew by 229.67 points to trade at 24,181.91. Taiwan weighted advanced by 16.83 points to trade at 9,019.95. Singapore Strait times trading higher by 21.47 points at 3,516.04.
Today, Nifty has support at 4,470 and resistance at 4,565 and BSE Sensex has support at 15,460 and resistance at 15,750.
Market to head higher
The market is expected to head higher tracking firm US markets overnight. Also most of the Asian markets were trading higher today, 12 September 2007.
However some nervousness may prevail as the government which held initial talks with its communist allies yesterday, 11 September 2007 over a controversial India-U.S. nuclear deal, threatened to split the ruling coalition. As per Foreign Minister Pranab Mukherjee, the meeting framed broad issues to be taken up for discussions and the committee would meet again on 19 September 2007.
Also the Index of Industrial Production (IIP) data for July 2007 is due today, 12 September 2007. IIP was up 9.8% in June 2007 compared with 9.7% in June 2006. It edged up 11% in April-June 2007 as against 10.5% in April-June 2006. The rise in IIP was due to continuing growth in manufacturing and electricity sectors.
Most of the Asian markets were higher today, 12 September 2007, in the wake of Wall Street's strong gains overnight. Hang Seng (up 0.96% at 24,181.91), Japan's Nikkei (up 0.36% at 15,934.36), Taiwan Weighted (up 0.19% at 9,019.95) and Singapore's Straits Times (up 0.61% at 3,516.04) gained. However, South Korea's Seoul Composite slipped 0.77% at 1,833.1
US markets advanced sharply yesterday, 11 September 2007 as investors grew more confident that the Federal Reserve will lower interest rates next week, even after its chairman gave no clues about the central bank’s intentions. The Dow Jones Industrial Average (DJIA) rose 180.54 points, or 1.38%, to 13,308.39. The Standard & Poor's 500 index rose 19.79 points, or 1.36%, to 1,471.49, while the Nasdaq Composite index rose 38.36 points, or 1.50%, to 2,597.47.
Crude oil prices held near a record high over $78 a barrel on Wednesday, 12 September 2007, after OPEC's token output increase failed to soothe consumers' worries about falling inventories. US light crude for October delivery rose 8 cents to $78.31 a barrel, after a record close yesterday, 11 September 2007 of $78.23, and within striking limit of 1 August 2007’s record high of $78.77.
As per provisional data, foreign institutional investors (FIIs) purchased shares worth a net Rs 256.59 crore, while domestic institutional investors (DIIs) were net sellers of shares worth Rs 444.75 crore on Tuesday, 11 September 2007.
The BSE 30-share Sensex shed 54.06 points or 0.35% at 15,542.77, on Tuesday, 11 September 2007. It is now 326.08 points away from its all time high of 15,868.85 hit on 24 July 2007.
The S&P CNX Nifty declined 10.80 points or 0.24% at 4,497.05, on Tuesday, 11 September 2007
Market may witness lackluster trades
The mood of the market is expected to remain positive on the back of gains in the US markets and positive Asian indices in current trades which also help the local indices advance further. However, presence of intra-day volatility due to lack of clarity may see the market remain edgy. Among the indices, the Nifty could test higher levels around 4550 and 4620 while on the downside the index has a strong support at 4450-4410 levels. The Sensex has a likely support at 14900 and may face resistance at 15850.
US indices gained marginally on Tuesday on expectations of rate cuts in Fed meeting next week. While the Dow Jones gained by 181 points at 13308, the Nasdaq added 38 points to close at 2597.
Crude oil prices in the global market extended their upward trend, with the Nymex light crude oil for October series moved up by 74 cents a barrel at $78.23. In the commodity space, the Comex gold for December delivery jumped by $8.90 to settle at $721.10 a troy ounce.
Trading Calls
Nifty (4497) Sup 4471 Res 4531
Buy IDFC (133) SL 130
Target 139, 141
Buy Colgate (403) SL 398 Target 411, 414
Buy PNB (493) SL 488
Target 504,504
Sell Wipro (457) SL 462
Target 447, 445
Sell Deccan Chronicle (234) SL 238 Target 224, 223
Something to cheer about
Small cheer and great welcome makes a merry feast.
Bulls may be welcomed in style after a mixed week so far. The US market rallied overnight after two days of declines. Buoyed by the gains on Wall Street, stock benchmarks across Europe, Latin America and other emerging markets too ended higher. Asian markets have also opened up this morning. So, its quite natural that the Indian bulls will also resume their buying spree and lift the key indices close to their previous lifetime highs. Investors should do well to use the rally to exit weak stocks and move into better quality scrips or wait with cash for buying towards the end of the month. The big question is whether the merry feast will last beyond lunch time.
There is no panic as of now, with the market having bounced back smartly from late August. Still, with chances of the US economy slipping into a recession (or has it already done so?) growing by the day, one will have to keep oneself abreast with the global events. The standoff between the Congress and the Left also seems to continue, and various parties have already started preparing for the impending mid-term polls. We are all set for a good day ahead. The near-term outlook remains sluggish amid concerns about the economic downturn in the US and its wider global fallout, including that on India.
US stocks rallied the most this month on growing evidence that consumer spending was holding its own amid an economic slowdown and that corporate profit growth remained good.
General Motors posted the biggest advance in the Dow Jones Industrial Average after saying demand is strong. McDonald's climbed on sales that topped some analysts' expectations. Western Digital shares had its best gain in two weeks after the world's second-largest maker of hard-disk drives increased its profit forecast.
The Standard & Poor's 500 Index added 19.79 points, or 1.4%, to 1,471.49. The Dow surged 180.54 points, or 1.4%, to 13,308.39. The Nasdaq Composite Index rose 38.36 points, or 1.5%, to 2,597.47. Each index posted its biggest gain since Aug. 29.
Wall Street is betting that the Fed will lower the benchmark lending rate for the first time in four years to keep credit market losses from slowing economic growth. Fed fund futures contracts show a 72% chance the central bank will reduce its target rate for overnight bank lending by half a percentage point, up from 54% a week ago and down from 76% yesterday.
Speaking to the German central bank in Berlin, Fed chairman Ben Bernanke said the global saving glut was still helping to keep interest rates low, and borrowing costs may not rise much even if the pool of excess capital dwindles in coming decades. He didn't comment on interest rate policy or the economic outlook.
The National Association of Realtors reduced its home sales forecast for the ninth time this year and said the housing slump will extend into 2008. In other news, the July trade deficit narrowed to $59.2bn from an upwardly revised $59.4bn in the previous month. Economists expected a reading of $59bn.
Treasury prices fell, raising the yield on the 10-year note to 4.37% from 4.32% late on Monday. In currency trading, the dollar fell versus the euro and rose against the yen. COMEX gold for December delivery rose $8.90 to settle at $721.10 an ounce.
US light crude oil for October delivery rose 73 cents to settle at $78.22 a barrel on the New York Mercantile Exchange, an all-time high. OPEC agreed to boost its crude output by 500,000 barrels a day. The surprise move would take effect Nov. 1, the cartel said.
European stocks gained ground as hopes for US interest-rate cuts boosted some of the hardest-hit companies over the last month. The pan-European Dow Jones Stoxx 600 index rose 1.7% to 368.41. The UK's FTSE 100 closed up 2.4% at 6,280.70, while the German DAX 30 gained 1.1% to 7,457.90 and the French CAC 40 advanced 1.7% to 5,478.94.
Emerging markets too closed higher. The Bovespa in Brazil jumped 2.4% to 53,921 while the IPC index in Mexico gained 1% to 30,191. The RTS index in Russia added 0.7% to 1911 and the ISE National-30 index in Turkey climbed 1.6% to 61,949.
Most Asian markets were trading up this morning. The Nikkei in Tokyo advanced 56 points to 15,934 while the Hang Seng in Hong Kong shot up by 254 points to 24,206. The Straits Times in Singapore gained 21 points to 3516 while the Kospi in Seoul fell by 15 points to 1831.
The Morgan Stanley Capital International Asia-Pacific Index added 0.7% to 151.43 at 10:50 a.m. in Tokyo, with all 10 of the benchmark's industry groups advancing. Australia's S&P/ASX 200 Index rose 0.5%. South Korea and New Zealand were the only markets open for trading to decline.
Swinging market ended in red as benchmark Sensex swung nearly 200 points and Nifty swung over 50 points during the day. After opening with a positive bias key indices lost ground throughout the session as selling pressure in the IT and Auto stocks dragged the markets to close in negative territory. Mid-Cap and the Small-Cap indices also witnessed profit booking. On the other hand Power and Metal stocks were in demand. Finally, BSE 30-share benchmark Sensex slipped 54 points to close at 15542. NSE Nifty slipped 10 points at 4497.
Shares of Motilal Oswal Financial Services Ltd rose on debut. The scrip started trading at Rs938 on BSE against the issue price of Rs825 and finally ended on a premium of 18% at Rs973 touching an intra-day high of Rs997 and a low of Rs911 and recorded volumes of over 62,00,000 shares on NSE.
Idea gained by 1% to Rs123 after the local mobile-phone operator’s board approved a plan to put its wireless towers and other infrastructure into a separate company. The scrip touched an intra-day high of Rs125 and a low of Rs122 and recorded volumes of over 36,00,000 shares on NSE.
IFCI surged by over 5% to Rs77 following reports that Blackstone Group LP and Citigroup Inc. are among contenders to buy a 26% stake in IFCI. The scrip touched an intra-day high of Rs78 and a low of Rs75 and recorded volumes of over 7,00,00,000 shares on NSE.
Rallis spurred by over 3% to Rs325 following reports that the agrochemicals company belonging to the Tata group plans to bid for Japan's Arysta LifeScience Corp., the world's largest privately held crop-protection company. The scrip touched an intra-day high of Rs335 and a low of Rs320 and recorded volumes of over 11,000 shares on NSE.
Kinectic Engineering was frozen at 20% upper circuit following reports that the company has secured order from Tata Motors. The scrip touched an intra-day high of Rs138 and a low of Rs114 and recorded volumes of over 35,000 shares on NSE.
Gammon India after slipping nearly by 10% in the previous trading session ended 0.5% higher at Rs423. The stock yesterday fell following reports that the company faced criminal charges after a flyover being built by the company in the southern Indian city of Hyderabad collapsed. The scrip has touched an intra-day high of Rs439 and a low of Rs420 and recorded volumes of over 6,00,000 shares on NSE.
Rajesh Exports advanced by 2.5% to Rs698 amid reports that it is looking at buying jewellers in South India. The scrip touched an intra-day high of Rs709 and a low of Rs682 and recorded volumes of over 3,00,000 shares on NSE.
Cairn gained by 1.8% to Rs159 after the company announced that it has secured Government approval to build pipeline. The scrip touched an intra-day high of Rs161 and a low of Rs156 and recorded volumes of over 37,00,000 shares on NSE.
Power stocks sparked off. Suzlon surged by 3.8% to Rs1326, PFC was up by 2.2% to Rs195, NTPC gained 2.6% to Rs196 and APIL added 1.8% to Rs772.
IT stocks ended lower as rupee further strengthened against the USD. TCS was down by 2.2% to Rs1023, Infosys slipped by 2.6% to Rs1822, Wipro lost by 2% to Rs455 and Satyam Computer shed by 2% to Rs433.
Auto stocks were in reverse gear as selling pressure dragged them lower. Tata Motors slipped by 2% to Rs689; Maruti was down by 1.5% to Rs861, M&M slipped by 0.6% to Rs697 and TVS Motors declined by 2.5% to Rs71.
Banking stocks also were under pressure. SBI dropped by 1% to Rs1622, ICICI Bank was down by 1% to Rs901 and HDFC Bank edged lower by 0.7% to Rs1187. Bank of India, Bank of Baroda and Syndicate Bank were the major losers among the Mid-Cap stocks.
Global cues will again play an important role for the markets. The equity markets across the globe are now awaiting the outcome of the FED meet on September 18. Investors may well stay on the sidelines before the all-important announcement by Ben Bernanke. Also, one needs to be cautious with fresh concerns of inflation emerging from China. The ongoing consolidation will continue with intra-day gyrations and stock specific movement due to the lack of immediate triggers. Although stock specific activity will continue depending on the flow of news, the market is expected to consolidate at higher levels.
Stocks In News
Essel Propack could gain as a financial daily reports that it is in talks with Alcan for buying the latter's packaging unit. Hanung Toys might be another gainer amid reports that it has won a Rs6bn order from a Swedish company. Top IT companies may attract some attention as a newspaper report says they are among the suitors for bagging the $125mn deal from Dutch financial giant ING.
IDFC and Sintex Industries will advance as the RBI has increased the investment limit for FIIs in the two companies. General Atlantic has opted to exercise their conversion option of 1,055,570 preference shares into unregistered ADRs, represented by 10,555,700 equity shares @ Rs142.10 per share. General Atlantic had invested Rs 300 crores in Hexaware through a preferential allotment in early 2006.
Fund Activity:
FIIs were net buyers of Rs2.57bn (provisional) in the cash segment on Tuesday and the local institutions pulled out Rs4.45bn. In the F&O segment, foreign funds were net buyers of Rs4bn.
On Monday, FIIs were net sellers to the tune of Rs629mn in the cash segment. Mutual Funds were net sellers of Rs1.88bn on the same day.
Major Bulk Deals:
ABN Amro Bank has bought Deccan Chronicle while Fidelity Investment has sold it;
Macquarie Bank has sold GIC Housing Finance; Merrill Lynch has picked up GTC Industries; Blackstone Asia has sold HBL Power Systems; Morgan Stanley has purchased HTMT Global; Franklin Templeton MF and Goldman Sachs have bought
Motilal Oswal; CLSA Mauritius has sold OBC; Bear Stearns has sold Simplex Infra; Morgan Stanley has sold Sujana Tower; Sundaram MF has picked up Time Technoplast; Credit Suisse has purchased Vijaya Bank while Merrill Lynch and HSBC Financial have sold it.
Upper Circuit:
Usher Agro, ABG Heavy, Jayant Agro, Marksons, Kinetic Engineering, IID Forgings,
Shree Precoated, Time Techno, ION Exchange, Manali Petro.
Major News & Announcements:
SBI approves $800mn - $1bn loan to Tata Steel
RBI allows Foreign Funds to buy up to 74% in IDFC and Sintex
EKC to consider plan to sell Rs1bn of shares
Kinetic Engineering secures order from Tata Motors – Reports
Bhagyanagar Board to consider Preferential issue warrants
Sonata Software to spend Rs1bn to develop facility
Areva secures multimillion Euro contract
Wipro to make fresh investments in Mexico, says Premji
HCL Tech to offer IT Management service to Awalnet of Saudi Arabia
Classic Diamonds to open 4 outlets in UAE by 2007, ties up with retailer at UAE
Godawari Power board to consider raising funds on September 25
Venus Remedies secures approval to sell drug in Ukraine
Nagarjuna Construction secures order worth Rs2.72bn
Cairn gets Government approval to build pipelineTata Steel September 2007 futures most active
Futures settle at discount
The Nifty September 2007 futures settled at 4488.20, a discount of 8.85 points as compare to spot closing of 4,497.05.
The NSE F&O turnover was Rs 41739.52 crore as compared to Rs 37333.48 crore on Monday, 10 September 2007.
Tata Steel September 2007 futures settled at premium, at 714, compared to the spot closing of Rs 709. It was the most active contract with turnover of Rs 1810.75 crore.
Reliance Industries September 2007 futures settled at premium, at 1985.60, compared to the spot closing of Rs 1992.
IDBI September 2007 futures settled at premium, at 138.25, compared to the spot closing of Rs 137.45.
In the cash market, the S&P CNX Nifty was down 10.80 points or 0.24% at 4,497.05.
Daily Technical Analysis
Nifty — The index opened on a positive note yesterday, but was unable to sustain the higher levels. It drifted down throughout the day’s session and ended the day with a loss of 11 points.
Range-bound — The index is stuck in a trading band of 4,547 on the upside and 4,446 on the downside for the last 7 trading sessions. Until it sees a breakout from the 4,547-4,446 range, range-bound trading can be expected. Breakout from the trading band will likely result in a directional move.
Resistance can be expected around 4,534 and 4,547 (the higher end of the band).
Support can be expected around 4,446 (the lower end of the band) and 4,404 (50 dma).
Conclusion — Expect range-bound trading between 4,547 and 4,446.
IT Earnings, BHEL, Top Equity funds
Q2FY2008 IT earnings preview
After tough Q1, the frontline tech stocks are estimated to report a marked improvement in their performance during the current quarter. Traditionally, Q2 is one of the best quarters for Indian IT companies. Moreover, the rupee has also stabilised in the range of Rs40.5-41/USD and the average realisation in Q2 could be around Rs40.7/USD, which is almost at the same level as reported by the tech companies in the previous quarters. Consequently, the frontline tech companies are estimated to show a growth of around 9% in their cumulative revenues on a sequential basis.
STOCK UPDATE
Bharat Heavy Electricals
Cluster: Apple Green
Recommendation: Buy
Price target: Rs1,954
Current market price: Rs1,910
Annual report review
Key points
- Bharat Heavy Electricals Ltd (BHEL) had a splendid FY2007, registering a 29% growth in its revenues to Rs18,739 crore and a 44% increase in its net earnings to Rs2,414.7 crore. The operating profit margin (OPM) expanded marginally (by 60 basis points) to 19.1%.
- The power business registered a healthy growth of 28% in its revenues while the industrial business recorded a rise of 32% in its revenues during the year.
- It was a remarkable year for BHEL in terms of order inflow, which grew at 88.2% year on year (yoy) to Rs35,643 crore. Consequently, the order backlog at the end of the year stood at Rs55,000 crore.
- BHEL's cash pile stood at a huge Rs5,808 crore at the end of FY2007, thanks to reduced working capital requirement and lower capital expenditure during the year.
- The company has crafted a "Strategic plan 2012" targeting a turnover of $10 billion by 2012 vs $4 billion at present.
- In our view, the government's focus on increasing power generation in order to meet its mission of providing "power for all by 2012" would be one of the key catalysts for BHEL's order inflows, providing clear visibility to the company's earnings.
- We believe in future, the execution capability is going to be a key differentiating factor in this business and BHEL, which is a large player, will be better placed to secure the best orders in the industry. Hence, we remain bullish on the stock and reiterate our Buy recommendation with a price target of Rs1,954. At the current market price Rs1,910 the stock is trading at 30.4x its FY2008E earnings and 24.4x its FY2009E earnings.
Alphageo India
Cluster: Emerging Star
Recommendation: Buy
Price target: Rs517
Current market price: Rs416
Annual report review
Key points
- In FY2007, Alphageo India’s (Alphageo) revenues increased by around 128% year on year (yoy) to Rs54.3 crore. The operating profit rose by 128% yoy to Rs25.5 crore as compared with Rs11.2 crore in FY2006. However, the operating profit margin (OPM) remained almost flat at 46.9% in FY2007. The net profit grew at 78.3% yoy to Rs7.5 crore.
- The company witnessed a significant improvement in its project mix in FY2007, where the 3D projects made up around 77% of the total revenues as compared with around 44% in FY2006.
- The company's order book as on April 30, 2007 stood at Rs117.1 crore, which is around 70% higher than that of Rs68.8 crore on April 30, 2006. Around 85% of the company's current order book comprises of 3D projects.
- During the year, the company received a Rs58.4 crore contract from ONGC in the operational blocks of the Cauvery basin, Tamil Nadu. The contract will reduce company's excessive dependence on non-monsoon assignments.
- The Company added one more 3D crew in FY2007. The crew strength of the company now stands at five of which three are 3D crew and two are 2D crew.
- Alphageo is the largest private sector player with five crew (three 3D crew and two 2D crew) in operation for 2D and 3D seismic services. The company is well versed with almost all the terrains in the country, which makes the company one of the most experienced (private sector) players in the country to take the advantage of the ongoing boom in oil and gas exploration in the country. At the current market price of Rs416, the stock discounts its FY2009E earnings by 8.0x and is available at enterprise value (EV)/earnings before interest, depreciation, tax and amortisation (EBIDTA) of 4.0x. We maintain our Buy recommendation on the stock with a price target of Rs517.
SECTOR UPDATE
Steel
Sustained upturn in steel prices
The average international hot rolled coil prices has increased by approximately 6% in the last one month to $570 per tonne. Following the global buoyancy in the international market and the increase in feedstock prices, international companies such as POSCO and Hyundai steel have raised the prices for the second time in the last two months. We believe cost-push factors will keep the steel price firm for the medium term and increasing consolidation will ensure reduced volatility over the longer term.
MUTUAL GAINS
Sharekhan's top equity fund picks
We have identified the best equity-oriented schemes available in the market today based on the following 3 parameter : the past performance as indicated by the one and two year returns, the Sharpe ratio and Fama (net selectivity).
The past performance is measured by the one and two year returns generated by the scheme. Sharpe indicates risk-adjusted returns, giving the returns earned in excess of the risk-free rate for each unit of the risk taken. The Sharpe ratio is also indicative of the consistency of the returns as it takes into account the volatility in the returns as measured by the standard deviation.
FAMA measures the returns generated through selectivity, ie the returns generated because of the fund manager's ability to pick the right stocks. A higher value of net selectivity is always preferred as it reflects the stock picking ability of the fund manager.
Subscribe to:
Posts (Atom)