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Tuesday, September 18, 2007
Re ends strong on stock market rise
The rupee reversed early losses and crept higher on Tuesday as a strong rise in local stocks raised hopes that foreign capital inflows will hold up in coming months despite global credit market problems.
Investors also bought the rupee on expectations the US Federal Reserve would cut its federal funds rate by at least 25 basis points later in the day.
The partially convertible rupee ended at 40.48/49 per dollar, up nearly half a percent from the day's low of 40.65 and above 40.56/57 at Monday's close.
"Indian shares closed much stronger than their Asian counterparts, and that took the dollar bulls by surprise," said V. Rajagopal, head of FX trading at Kotak Mahindra Bank.
"There was a good chunk of inflows above the 40.55 per dollar mark," he said.
Indian shares rose 1.06 per cent on Tuesday to their highest close since late July, while most markets elsewhere in Asia fell on fears credit market problems were spreading.
Foreign funds have bought about $1.1 billion of Indian stocks so far this month after selling about $1.9 billion last month, taking their net investment to nearly $9.5 billion in 2007.
A U.S. rate cut would widen India's 250 basis point rate premium. The could attract more foreign interest in the rupee, which hit a nine-year high of 40.20 in July and has risen more against the dollar than any other Asian currency this year.
Some analysts expect the rupee to open around the 40.40 per dollar on Wednesday if the Fed cuts rates by 25 basis points, but likely central bank intervention may check steep gains.
The Reserve Bank bought more than $38 billion in the first seven months of 2007 trying to rein in the rupee's rapid rise.
Market Close: Smart recovery..but !
The initial sessions saw a yoyo movement on both positive as well as the negative zone. However, the momentum gained on the back of support from the investors as the session progressed. All eyes are on the out come of the Fed meet scheduled today. The probability of 25bps rate cut is quite strong and markets seems to have discounted that. Small and mid caps continued to attract the investors. Banking, Metals, Consumer Durables, Reality and Oil marketing counters were the gainers for the day. Appreciating rupee and sub prime worries continue to weigh on Technology counter. European indices continued to gain strength after a start in green.
Credit worries in England indicate that condition has worsened...but we would rather say that it is more of confidence crises. Rate cut is for sure ! However on crude prices above $81 again puts Fed between hard and rock. High crude prices will probably lead to inflation. At the same time interest rate cut is the best possible solution for credit worries. Tough one! Let?s see how Fed figures out this.
Sensex closed higher by 165 points. Weighing on were the losses in Cipla (-2.04%), Wipro (-1.04%), ITC (-0.50%) and Dr. Reddy?s (-0.28%). Losses were restricted by gains in ICICI Bank (+2.86%), SBI (+2.82%), Bharti Airtel (+2.06%) and Reliance Energy (+1.80%).
Transport Corporation of India (TCI) is a leading surface transport company. It provides a single window for cargo transportation services ranging from door to door distribution, time committed high value cargo delivery or handling of over dimensional cargo. The company continues to invest into Property for its warehouses and a bulk of the capital employed in the new expansion (10 mn Sq feet) is through the own model. That is some thing that we do not like. However, Do read our note on the company to know the investment arguments in favor of the company. Stock closed higher by 15%.
Bata is a well known name in the footwear industry. Bata is a well know brand with a leading position in India. In India it manufactures scandals, chappals, sports shoes as well as formal shoes. Bata rules the market in the school footwear sector. The top line for the June ended quarter improved by 12% YoY. EBIDTA margins improved by 300 bps on annualised basis. EBITDA stood at Rs.18 crs. The bottom line was up by 36% to Rs.12 cr. Given the momentum of change and the new focus of Management, we are willing to give the company the benefit of doubt. With an enhanced focus on returns and the big opportunity of growing faster than the unorganised market makes this company a decent bet. Bata closed higher by 4%.
Financial Technologies (FT) has honed the technology for straight through processing (Transaction handling ). It is also the promoter and owner of Multi Commodity Exchange in India MCX which now has about 70% marketshare in the commodity exchange market. The company is bullish on i-win which is a mobile trading platform to pick up. However we believe that the National Spot exchange and Forex exchange would be the drivers for its products. Do read our note on the company to know why higher valuations are justified. FT closed higher by 3%.
Technically Speaking: Sensex witnessed an intra day high of 15,692 and low of 15,469. Advances out numbered declines in the ratio of 2:1. Volume for the day stood at Rs.5,585 cr. Market ened up by 160 point but failed to close above the key resistance level of 15675. The trend is positive, so any fall should be used to buy into the rally. Key support on the lower side is 15480 and the key resistance is 15675--15725
No Paris Hilton - but we track it!
18-SEP-2007,INDOWIND,Indowind Energy Limited,AMBIT SECURITIES BROKING PVT. LTD.,BUY,245828,135.60,-
18-SEP-2007,INDOWIND,Indowind Energy Limited,ASIT C MEHTA INVESTMENT INTERRMEDIATES LTD,BUY,403690,134.75,-
18-SEP-2007,INDOWIND,Indowind Energy Limited,GANSHYAMBHAI SANALAL SHAH,BUY,242963,132.42,-
18-SEP-2007,INDOWIND,Indowind Energy Limited,P R B SECURITIES PRIVATE LTD,BUY,377941,135.59,-
18-SEP-2007,INDOWIND,Indowind Energy Limited,PRASHANT JAYANTILAL PATEL,BUY,240643,136.17,
18-SEP-2007,INDOWIND,Indowind Energy Limited,AMBIT SECURITIES BROKING PVT. LTD.,SELL,245828,135.92,-
18-SEP-2007,INDOWIND,Indowind Energy Limited,ASIT C MEHTA INVESTMENT INTERRMEDIATES LTD,SELL,403690,134.79,-
18-SEP-2007,INDOWIND,Indowind Energy Limited,GANSHYAMBHAI SANALAL SHAH,SELL,256007,134.72,-
18-SEP-2007,INDOWIND,Indowind Energy Limited,P R B SECURITIES PRIVATE LTD,SELL,377941,135.60,-
18-SEP-2007,INDOWIND,Indowind Energy Limited,PRASHANT JAYANTILAL PATEL,SELL,240643,136.27,-
Sensex ends up 165 pts
The Sensex opened with a positive gap of 43 points at 15,547, but slipped to a low of 15,469 - down 78 points from the day's open.
Fresh buying at lower levels helped the index move into positive zone in early noon deals. Buying gained momentum towards the closing bell, and the index rallied to a high of 15,692 - up 223 points from the day's low.
The Sensex finally ended with a gain of 165 points at 15,669.
The BSE Bankex advanced 2.5% to 8291. The Oil & Gas and PSU indices were up 1.5% each at 8499 and 7386, respectively.
The market breadth was fairly positive - out of 2,837 stocks traded, 1,813 advanced, 968 declined and 56 were unchanged today.
INDEX MOVERS...
ICICI Bank soared 3.4% to Rs 925, and SBI surged nearly 3% to Rs 1,693.
Bharti Airtel and Reliance Energy rallied over 2% each to Rs 832 and Rs 927, respectively.
ONGC moved up 1.8% to Rs 851. Mahindra & Mahindra, Reliance and Grasim gained 1.5% each at Rs 708, Rs 2,058 and Rs 3,257, respectively.
NTPC, Reliance Communications, Larsen & Toubro and ACC were up over 1% each at Rs 185, Rs 537, Rs 2,620 and Rs 1,123, respectively.
...AND THE SHAKERS
Cipla dropped 2% to Rs 168. Wipro slipped over 1% to Rs 444.
VALUE & VOLUME TOPPERS
Reliance Capital topped the value chart with a turnover of Rs 224 crore followed by Reliance (Rs 176 crore), Reliance Industrial Infrastructure (Rs 130 crore), Reliance Energy (Rs 129 crore) and Iwind Energy (Rs 121.50 crore).
Ispat Industries led the volume chart with trades of around 3.20 crore shares followed by Sun Iron Steel (1.05 crore), IFCI (94.80 lakh), Mangalore Chemicals (94.50 lakh) and Iwind Energy (89.65 lakh).
Post Market Commentary
The market surged to close the session in a positive territory as BSE Sensex closed higher by 164.69 points at 15,669.12 and Nifty grew by 51.55 points to close at 4546.20. The BSE mid cap and Small cap closed firm as it was up by 69.66 points and 140.66 points at 6,985.03 and 8,780.09 respectively. The market breadth was strong with 1813 stocks advanced and 968 stocks declined.
BSE IT index closed little lower by 1.85 points at 4,385.41 as Rolta India (3.53%), Finance tech (3.40%), Patni Computers (1.16%), HCL tech (0.90%), TCS (0.48%) and Tech Mahindra (0.44%) closed in green.
BSE bankex index surged by 199.77 points to close at 8,290.54 as Bank of Baroda (4.48%), ICICI bank (3.39%), Oriental bank (3.51%), SBI (2.85%), Yes bank (2.79%) and Union bank (1.32%) closed in green.
BSE oil & gas index grew by 126.73 points to close at 8,498.82 as GAIL India (3.58%), ONGC (1.80%), BPCL (1.58%), Reliance industries (1.48%), Reliance petroleum (1.31%) closed higher.
BSE Capital goods index advanced by 158.18 points to close at 13,863.03 as BEML (3.53%), Suzlon energy (3.04%), Siemens (2.93%), Praj industries (2.44%), ABB (1.71%) closed higher.
BSE Health Care Index closed lower by 7.37 points at 3,661.61 as Cipla (2.01%), Nicholas piramal (1.96%), Biocon (1.05%), Cadila health care (0.48%), Dr reddy''s lab (0.20%), Glenmark (0.17%) closed in negative.
BSE Metal index closed higher by 73.54 points at 12,085.12 as Nalco (2.51%), Welspun (1.31%), JSW steel (1.10%), SAIL (0.97%), Tata Steel (0.87%) and Jindal steel (0.67%) closed in positive.
BSE FMCG index grew by 7.17 points to close at 2,097.96 as Bata India (4.48%), Nestle (4.06%), Dabur (3.06%) and Tata tea (2.76%) closed in positive.
Sensex ends buoyant
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 43 points at 15,547. The market was range-bound, but stayed above the 15,550 mark in the mid morning trades. As trading progressed, the index lost ground by the afternoon and touched the day's low at 15,469. The eruption of buying towards the close in heavyweights, banking and oil stocks lifted the Sensex to touch the intra-day high of 15,692 and close at 15,670, up 165 points. The Nifty ended the session at 4,546, up 52 points.
The breadth of the market was positive. Of the 2,837 stocks traded on the BSE, 1,813 stocks advanced, 968 stocks declined and 56 stocks ended unchanged. Among the sectoral indices the BSE Bankex index jumped 2.47% at 8,291 followed by the BSE Oil & Gas index (up 1.51% at 8,499), the BSE PSU index (up 1.48% at 7,386) and the BSE CG index (up 1.15% at 13,863).
Barring a few select counters, most of the heavyweights ended at higher levels. Among the blue chips ICICI Bank shot up by 3.39% at Rs925, SBI soared 2.85% at Rs1,693, Bharti Airtel surged 2.24% at Rs833 and Reliance Energy advanced by 2.08% at Rs927. ONGC added 1.80% at Rs851, M&M moved up 1.48% at Rs709, Reliance Industries scaled up 1.48% at Rs2,058 and Grasim was up 1.44% at Rs3,257. Among the laggards Cipla dropped 2.01% at Rs169 and Wipro shed 1.21% at Rs444 while ITC, Infosys, Dr Reddy's Lab, Satyam Computers, HDFC, Tata Motors and Ranbaxy closed marginally lower.
Banking stocks were in the limelight and closed with strong gains. Centurion Bank of Punjab vaulted 6.23% at Rs40, Bank of Baroda soared 4.48% at Rs296, Oriental Bank surged 3.51% at Rs229 and ICICI Bank advanced by 3.39% at Rs925. Andhra Bank, SBI, Allahabad Bank, Yes Bank, Kotak Bank and Federal Bank gained over 2% each.
Over 3.20 lakh Ispat industries shares changed hands on the BSE followed by Sun Iron & Steel (1.05 crore shares), IFCI (94.57 lakh shares), Manglore Chemical & Fertilisers (94.32 lakh shares) and Indowind Energy (89.61 lakh shares).
Reliance Capital clocked a turnover of Rs224 crore on the BSE followed by Reliance Industries (Rs176 crore), Reliance Industrial Infrastructure (Rs129 crore), Reliance Energy (Rs128 crore) and Indowind Energy (Rs121 crore).
Poll Results - The Fed will
Decrease by 25 bps - 253 votes (55%)
Decrease by 50 bps - 113 votes (24%)
Not change Interest rates - 90 votes (19%)
Total Number of votes - 456
Sensex settles above 15,600
The market surged in the second half of the trading session tracking recovery in European markets which started after Indian market. The market was range-bound in early afternoon trade. Asian markets were weak. With today’s gains, the market came out of its two-day losing streak.
US stock futures pointed slightly higher opening today, 18 September 2007, ahead of the two main events viz. interest-rate decision by the US Federal Reserve and third quarter earnings from investment bank Lehman Brothers post crisis in the subprime mortgage market and the credit crunch which was triggered last month.
The BSE 30-share Sensex advanced up 164.69 points or 1.06% at 15,669.12. It opened higher at 15,547.07 but later slipped to a low of 15,468.80 briefly. Sensex hit a high of 15,691.88 in late trade. It oscillated in a range of 223.08 points for the day.
The Sensex is 199.73 points away from its all time high of 15,868.85 hit on 24 July 2007.
The S&P CNX Nifty rose 51.55 points or 1.15% at 4,546.20. The Nifty September 2007 futures settled at 4542, a discount of 4.20 points as compared to spot closing
The market breadth, indicating overall health of the market was strong on BSE, with 1794 shares advancing as compared to 958 that declined, while 55 remained unchanged.
The BSE Mid-Cap index rose 1.01% to 6,985.03 underperforming the Sensex while the BSE Small-Cap Index gained 1.63% to 8,780.89 outperforming the Sensex.
The total turnover on BSE amounted to Rs 5585 crore as compared to Rs 4688 crore on Monday, 17 September 2007
The NSE F&O turnover was Rs 45069.25 crore as compared to Rs 35768.53 crore on Monday, 17 September 2007
Among the 30-member Sensex pack, 21 gained while the rest slipped
Banking shares surged on renewed buying. India’s largest private sector bank in terms of net profit ICICI Bank advanced 3.04% to Rs 921.05 on 6.80 lakh shares. It was the top gainer from Sensex pack.
Other banking shares - State Bank of India (up 2.70% to Rs 1691), Bank of India (up 2.48% to Rs 249.80), Bank of Baroda (up 4.15% to Rs 295), Vijaya Bank (up 3.38% to Rs 61.10) and Andhra Bank (up 2.81% to Rs 93.30), also edged higher.
India’s largest listed cellular services provider by sales, Bharti Airtel advanced 2.34% to Rs 832.50. The stock gained after foreign brokerage house Citigroup recommended buy rating on the stock with a 12-month target price of Rs 1050.
India’s largest private sector power utility company in terms of sales, Reliance Energy (REL) hit all time high of Rs 933 in intra-day trade. It settled 1.97% higher at Rs 925.70. Yesterday, 17 September 2007 the stock gained 2.71% to Rs 906.60. As per recent reports, Supreme Court has allowed the company to bid for Rs 2,600 crore Mumbai sea link project.
ONGC (up 1.48% to Rs 848.10) and Mahindra & Mahindra (up 1.55% to Rs 709), were the other gainers from Sensex pack.
Bhel, the country’s largest power equipment maker in terms of sales rose 0.19% to Rs 1901, off its day’s high of Rs 1930. Bhel is reportedly looking at mergers and acquisition to fuel inorganic growth. Reports also suggest that the company is targeting a turnover of Rs 45,000 crore by 2012.
However pharma and software shares were subdued. Cipla, the country’s third largest pharma company in terms of net sales, slipped 2.04% to Rs 168.45 on 7.16 lakh shares. It was the top loser from Sensex pack.
India’s second largest pharma company in terms of net sales, Dr Reddy’s slipped 0.20% to Rs 641.
IT pivotals Wipro (down 1.20% to Rs 443.50), Satyam Computers (up 0.17% to Rs 421.50), and Infosys Technologies (down 0.03% to Rs 1805) edged lower.
India’s largest private sector entity by market capitalisation and oil refiner Reliance Industries (RIL) recovered sharply from day’s low of Rs 2007. It settled 1.21% higher at Rs 2053 on 8.65 lakh shares. As per recent reports, RIL is foraying in shipbuilding and dredging business with two separate companies. It plans to invest around $1 billion each in two companies and has begun talks with international majors for a strategic tie-up for the dredging business
Reliance Capital was the top traded counter on BSE with total turnover of Rs 223.96 crore followed by Reliance Industries (Rs 176.09 crore), Reliance Industrial Infrastructure (Rs 129.33 crore), Reliance Energy (Rs 128.83 crore) and Indowind Energy (Rs 120.22 crore).
Among side counters, Engineers India (up 20% to Rs 581.80), Zandu Pharmaceuticals (up 20% to Rs 4341.65) and Kew Industries (up 19.98% to Rs 34.85) surged
Linc Pen & Plastics (down 9.64% to Rs 45), Jindal Worldwide (down 7.95% to Rs 150), Andhra Sugars (down 7.75% to Rs 91.10), and Nagreeka Exports (down 6.71% to Rs 40.30), slipped.
Raymond galloped 20.01% to Rs 323.30 on huge volumes of 17.67 lakh shares, boosted by a block deal of 6.87 lakh shares struck on the counter at Rs 273 per share by 12:36 IST on BSE. The average daily volume in the stock in the past one year was 29414 shares
GAIL (India) rose 3.38% to Rs 323.75 on its plans to raise up to $1.72 billion from domestic and foreign markets to double its pipeline network by 2011.
Neyveli Lignite Corporation slipped 3.31% to Rs 96.25 after National Stock Exchange (NSE) banned fresh positions in the derivatives contracts as 95% marketwide position limit was crossed yesterday, 17 September 2007.
Indian Hotels Company gained 1.30% to Rs 131.30 on reports that it acquired a 10% stake in US-based Orient-Express Hotels for $211.28 million.
Puravankara Projects rose 4.45% to Rs 394.40 after it reported 43.59% surge in net profit to Rs 35.64 crore on 27.79% total income rise to Rs 120.4 crore in Q1 June 2007 over Q1 June 2006.
Jai Corp jumped 5% to Rs 8951.50 after it fixed 12 October 2007 as the record date for the purpose of stock split from existing face value Rs 10 per share to a face value of Re 1 per share and also for issue bonus shares in the ratio of 1:1.
PSL had gained 0.35% to Rs 353 after it bagged a $17 million contract from Fusion Provida, England for supplying 1,24,000 meters of 3 LPE coated line pipes.
State Trading Corporation of India surged 20% to Rs 238.35 after it said that a board meeting will be held on 26 September 2007 to recommend issue of bonus shares in a ratio of 1:1.
Indo Asian Fusegear surged 6.14% to Rs 121 on its plans to foray into power distribution business. It is setting up a new company Indo Asian Power Distribution and Infrastructure (IAPDIL) with an investment of Rs 25 crore.
Lanco Infratech jumped 4.79% to Rs 331.55 after it entered into a memorandum of understanding with Gulftainer Company, UAE to co-operate on a variety of port and transportation projects. Gulftainer Company is a leading port developer and operator in the Emirate of Sharjah in the United Arab Emirates.
McNally Bharat Engineering Company surged 5% to Rs 207.20 after the company received an order from NTPC for supply of dry fly ash extraction & collection system for its Rihand plant in Uttar Pradesh. The order is valued at Rs 13.80 crore.
KLG Systel soared 4.05% to Rs 527 after it bagged orders worth Rs 32.5 crore from the Government of Haryana and Rs 7.5 crore from Government of Rajasthan. With these new orders, the company has bagged projects worth a total of Rs 100 crore in the month of September 2007 so far.
Reliance Industrial Infrastructure galloped 8.60% to Rs 782 on expectations of orders from its parent Reliance Industries (RIL) to build gas pipelines and warehouses.
European markets recovered after weak opening. Key benchmark indices in France (up 0.25% to 5,453.24) and United Kingdom (up 0.31% to 6,202) advanced. Germany’s DAX index was down 0.16% to 7,468.25.
Asian markets settled lower today, 18 September 2007 hurt by concerns related to the health of the global credit markets, as well as nervousness ahead of the US Fed meet scheduled later in the day. Japan's Nikkei (down 2.02% at 15,801.80), Hong Kong's Hang Seng (down 0.09% at 24,576.85), and South Korea's Seoul Composite (down 1.77% at 1,838.61) declined.
However Singapore's Straits Times (up 0.04% at 3,477.75) and Shanghai Composite (up 0.07% to 5,425.20) edged higher
Dow Jones industrial average futures rose 29 points or 0.21% to 13,532. S&P 500 futures rose 2 points or 0.13% to 1,491.80, and Nasdaq 100 Index futures rose 3.50 points or 0.17% to 2,009.50.
Crude oil prices surged to a record high above $81 a barrel on Tuesday, 18 September 2007 drawing strength from concerns of a winter supply squeeze in the world's top consumer where an anticipated interest rate cut is calming recession fears. US light crude for October delivery rose 56 cents to $81.13 a barrel after touching a high of $81.18 earlier in today’s session. London Brent crude for November rose 22 cents to $77.20 a barrel.
The market may remain volatile
The market may witness cautious trend as US indices ended marginally down yesterday and Asian indices are exhibiting weak trends in the morning trades. Investors should maintain caution as profit taking at higher levels may pull down the market. Among the local indices the Nifty could test 4450 and 4380 on the downside while on the upper side it may move up to 4515. The Sensex has a likely support at 15250 and may face resistance at 15700.
Stocks slipped on Monday, as investors worried that the central bank won't cut interest rates by as much as they had hoped. While the Dow Jones ended in a negative at 13403 declined by 39 points, the Nasdaq down by 21 points at 2582.
U.S. crude advanced further on Monday on worries about rising demand amid tight world supplies heading into the winter heating oil season. with the Nymex light crude oil for October delivery adding $1.47 to close at $80.57 a barrel. In the commodity space, the Comex gold for December series gained $6 to settle at $723.80.
Pre Market Watch
The Indian market is likely to negative opening due to negative global cues. Also the investors were concerned about the Federal Reserve decision about the interest rate and this will add to the investor''s sentiments. On Monday, the Indian markets ended in a negative note as BSE Sensex closed lower by 99.37 points at 15,504.43 while Nifty fell by 23.35 points to close at 4,494.65. We expect the market to remain choppy during the trading session.
Monday, the US markets closed in red. The Dow Jones Industrial Average (DJIA) dropped 39.10 points to close at 13,403.42. The S&P 500 (SPX) index decreased by 7.60 points to close at 1,476.65 and the NASDAQ Composite (RIXF) fell 20.52 points to close at 2,581.66.Indian ADRs ended mixed. In technology sector, Patni computers fell by (4.50%) along with Infoys by (0.51%), Satyam by (0.50%) while Wipro closed higher by (0.15%). In banking sector, HDFC bank and ICICI Bank lost grounds by (1.49%) and (0.27%) respectively. MTNL and VSNL fell by (2.55%) and (1.68%) respectively. In automobile sector, Tata Motors jumped by (0.35%).
The major stock markets in Asia are trading weak. The Nikkei 225 index slliped by 286.11 points to trade at 15,841.31, Hang Seng fell by 100.51 points to trade at 24,498.83. Straits Times trading lower by 11.99 points to trade at 3,464.32.
Today, Nifty has support at 4,410 and resistance at 4,525 and BSE Sensex has support at 15,210 and resistance at 15,590.
Morning Call - Sep 18 2007
Market Grape Wine :
In House :
Nifty at a supp of 4470 and 4440 with resis at 4542 and 4577
Intra day: Buy Hindalco above 153 with SL of 149.50
Buy Bharatforge above 273.50 with a TGT of 282 and a SL of 269
F&O: Buy HDIL above 617 with a TGT of 637 and a SL of 609
Sell Praj below 209 with SL of 213
Out House :
Markets at a support of 15423 & 15342 levels with resistance at 15595 & 15678 levels .
Buy : RIL
Buy : REL
Buy : IFCI & NagarFert
Buy : HanunToys
Buy : Titan
Buy : IolBroad & ABAN
Buy : ACC & Grasim
Buy : Gitanjali & Aptech
Dark Horse : REL , Kotak , IFCI , Aban , PunjLLoyd , Everon & Jphydro
Nifty September 2007 futures below 4,500
Turnover slumps
The Nifty September 2007 futures settled at 4,483.90, a discount of 10.75 points as compared to spot closing of 4,494.65.
The NSE F&O turnover was Rs 35,768.53 crore as compared to Rs 47,177.37 crore on Friday, 14 September 2007.
Reliance Capital September 2007 futures settled at premium, at 1383.60, compared to the spot closing of Rs 1377.05. It was the most active contract with turnover of Rs 1207.01 crore.
GMR Infrastructures September 2007 futures settled at premium, at 775, compared to the spot closing of Rs 768.55. The National Stock Exchange had lifted ban from building fresh positions on the underlying from today, 17 September 2007.
Tata Steel September 2007 futures settled at premium, at 709, compared to the spot closing of Rs 706.
In the cash market, the S&P CNX Nifty was down 23.35 points or 0.52% at 4,494.65.
US Market cautious ahead of crucial meeting
Traders are aware that their dream might not be totally fulfilled
US Market witnessed cautious trading today, Monday, September 17, 2007 marked by lower than normal volume. Many traders stayed away ahead of Federal Reserve’s crucial meeting on interest rates tomorrow. Nine of the ten sectors ended the day with losses. Energy made the sole advance with oil prices crossing $80/barrel.
The Dow Jones industrial Average closed lower by 39 points at 13,403.42. The Nasdaq Composite Index, finished lower by 20.5 points at 2,581.66. S&P 500 finished lower by 7.6 points at 1,476.65.
Twenty-one out of thirty Dow stocks ended in red today. CoCo-Cola was the main Dow laggard. GM was one of the few Dow winners.
Financial stocks were heavily hit today. Bank of America acknowledged late in the session that credit market turmoil is expected to have a "meaningful impact" on its third quarter investment banking results.
Things kicked off on a sour note today after Microsoft shares slid 1.2% after a European court rejected the software giant's appeal of a 500 million euro fine.
General Motors shares were up almost 3% after the automaker continued contract talks with the United Auto Workers.
E*Trade says that its 2007 profit will be a third less
Market is expecting a 25-50 bps cut in interest rate in fed fund rate. The fed funds rate is the rate that banks to charge each other for overnight loans and is a key rate used to price everything from corporate loans to credit card rates.
But at the same time, market knows that their dream of 50 bps might not come through and they have to remain happy with only the 25 bps cut.
A surprising piece of news came from E*Trade, best known as an online brokerage, which announced that its profit for 2007 will be a third less than previously expected because of the mortgage crisis.
Trading volumes were lighter than usual, with some investors opting to sit out of the action ahead of the Fed meeting Tuesday. Volume at the New York Stock Exchange topped 1.1 million shares, with declining stocks outpacing advancers 11 to 5. At the Nasdaq, more than 1.4 billion shares exchanged hands, and declining issues topped advancing stocks 5 to 2.
Crude ends above $80 for the second time
Crude oil future prices once again rose today and reached another all time new high. Crude prices closed above $80/barrel for the second time after traders continued with their speculation that U.S. oil and gasoline stockpiles extended declines as refiners slowed operations.
Crude-oil futures for light sweet crude for October delivery closed at $80.57/barrel (higher by $1.47/barrel or 1.9%) on the New York Mercantile Exchange. The contract had dropped to a low of $78.80 early in the session but then rebounded as high as $80.70.
Today, Goldman Sachs said its analysts raised their year-end forecast for oil prices to $85 a barrel for 2007 and pegged the year-end price at $95 a barrel for 2008.
Tomorrow is a crucial day for the market as Federal Open Market Committee will announce the latest on interest rate cut at 2.00 P.M. Prior to that, Lehman Brothers will come out with its earnings report. Other than that, there will be a number of economic reports to dictate market momentum. Most important among them will be the Producer Price Index at 8:30 ET will offer insight into inflationary pressures at the production level.
Grey Market - PowerGrid, Dhanus, Kouton, Consolidated
Circuit Systems 35 4 to 5
Dhanus Tech 280 to 295 80 to 90
Consolidated Constructions 460 to 510 130 to 150
Koutons India 370 to 415 85 to 90
Kaveri Seeds 150 to 170 6 to 8
Allied Computers 12 1 to 1.50
Power Grid corporation 44 to 52 19 to 20
Magnum Ventures 27 to 30 1 to 2
Market to stay cautious
The market is expected to stay cautious ahead of the crucial US Federal Reserve’s meeting today evening, 18 September, which will set the trend for the global markets. The Fed is expected to cut the rate by atleast 25 basis points.
Asian markets opened weaker today, 18 September 2007 hurt by concerns related to the health of the global credit markets, as well as nervousness ahead of the US. Japan's Nikkei (down 1.77% at 15,841.31), Hong Kong's Hang Seng (down 0.41% at 24,498.83), Singapore's Straits Times (down 0.34% at 3,464.32) and South Korea's Seoul Composite (down 0.95% at 1,853.88) declined.
However Shanghai Composite rose 0.18% to 5,431.31
Wall Street shares declined moderately yesterday, 17 September 2007 as investors anxiously awaited the Federal Reserve's impending decision on interest rates. The Dow Jones industrial average fell 39.10 points, or 0.29%, to 13,403.42. Broader stock indicators showed somewhat steeper losses. The Standard & Poor's 500 index fell 7.60 points, or 0.51%, to 1,476.65, and the Nasdaq Composite index lost 20.52 points, or 0.79%, to 2,581.66.
Crude oil prices surged to a record high above $81 a barrel on Tuesday, 18 September 2007 drawing strength from concerns of a winter supply squeeze in the world's top consumer where an anticipated interest rate cut is calming recession fears. US light crude for October delivery rose 56 cents to $81.13 a barrel after touching a high of $81.18 earlier in today’s session. London Brent crude for November rose 22 cents to $77.20 a barrel.
As per provisional data, foreign institutional investors (FIIs) purchased shares worth a net Rs 94.34 crore, while domestic institutional investors (DIIs) were net sellers of shares worth Rs 140.57 crore on Monday, 17 September 2007
The BSE 30-share Sensex lost 99.37 points or 0.64% at 15,504.43 on Monday, 17 September 2007. The S&P CNX Nifty declined 23.35 points or 0.52% at 4,494.65, on that day.
Intraday Stock Ideas
Nifty (4495) Sup 4451 Res 4538
Buy ACC (1110) SL 1099
Target 1030, 1035
Buy Praj Inds (211) SL 207 Target 219, 221
Sell Cipla (172) SL 176
Target 166, 163
Sell LIC Hsg (205) SL 209 Target 197, 194
Sell HCL Infosys (214) SL 218 Target 206, 203
World worries, reason for concern
There is a great difference between worry and concern:
Worry frets without a problem; concern solves the problem.
The Fed will finally take a call on cutting interest rates, but the big question is by how much? Will it be 25 bps or 50 bps? Even more so, whether the cut (and a few more down the line) will be sufficient enough to lift the US economy out of the abyss that it has fallen into. And, even as world market awaits the action from Ben Bernanke & Co., his predecessor, Alan Greenspan has been making a lot of noises about the health of the US economy and what has led to the current crisis of confidence in the credit markets. According to him "this was an accident waiting to happen". He says the odds of a recession have grown since earlier this year, even though the world's largest economy is not doing badly at this stage.
We'll hear today what Bernanke thinks about the US economy, the turmoil in the housing sector and its ramifications for the global economy. Any adverse remarks from Bernanke could worsen the sentiment across global markets, and would also impact money flows towards emerging markets such as India.
With red ink splashed all over the world, we expect another weak opening, though on the whole the market will remain guarded ahead of the big event in the US later today. Lack of aggressive follow- up buying has made the market choppy of late, and until that happens the key indices will struggle to cross their previous lifetime highs. Eventually they will do so, given the strong outlook on the Indian economy (ADB has raised its forecast for India). But, one major worry will remain. That is global liquidity and FII flows. The outlook in the short term is that of caution and fresh purchases should be avoided till the haze is cleared. We see a couple of weak weeks ahead. Use this week to lighten your position as short term spurts are likely.
US stocks closed marginally down on Monday ahead of the crucial Fed meeting amid continuous worries about a wider fallout of the subprime contagion. Withdrawals from British lender Northern Rock fanned fears over the current credit market turmoil and sent the S&P 500 Index down for the first time in five days.
Citigroup, Bank of America and Merrill Lynch led the fall among financial companies as traders pared bets the Fed will lower its benchmark rate by 50 bps. Microsoft fell after losing a European antitrust appeal.
The S&P 500 slipped 7.6 points, or 0.5%, to 1,476.65. The Dow Jones Industrial Average decreased 39.1 points, or 0.3%, to 13,403.42. The Nasdaq Composite Index dropped 20.52 points, or 0.8%, to 2,581.66.
About 1.1 billion shares changed hands on the New York Stock Exchange, the second fewest for a full session this year.
Fed funds futures contracts show a 50% chance that the American central bank will slash its benchmark rate from 5.25% to 4.75%, down from 58% odds on Sept. 14. Traders are certain of a cut of at least a quarter point.
Northern Rock tumbled to a seven-year low in London as hundreds of clients removed at least 2bn pounds ($4bn), or about 8% of the UK bank's total, since Sept. 14, according to an estimate by JPMorgan Chase.
The overnight rate banks charge to lend British pounds soared 60 basis points to 6.47%, according to the British Bankers' Association. The overnight rate for dollars rose 17 basis points to 5.3%.
After the close, discount brokerage E-Trade cut its profit outlook, saying that tighter credit conditions will force it to get out of businesses that don't deal directly with retail investors. Shares slumped 8% in extended-hours trading.
Former Fed chief Alan Greenspan says a risk of recession in the US is greater now than it was at the beginning of the year. In an interview with Fortune, Greenspan also said that the Fed is in a tricky situation now where they can't just cut rates anymore without risking boosted inflation.
Market breadth was negative. On the New York Stock Exchange, losers topped winners by 2 to 1 on volume of 1.1 billion shares. On the Nasdaq, decliners topped advancers by more than two to one on volume of 1.43 billion shares.
Treasury prices fell modestly, with the yield on the 10-year note standing at 4.46%, little changed from late on Friday. COMEX gold for December delivery rose $6 to settle at $723.80 an ounce.
US light crude oil for October delivery rose $1.47 to settle at $80.57 a barrel on the New York Mercantile Exchange, a fresh record close. The price of crude briefly hit an all-time trading high of $80.70 a barrel. The front-month contract was quoting 49 cents higher at $81.06 a barrel in extended trading in Asia.
Across the Atlantic, European shares lost ground with the banking sector once more under pressure amid Northern Rock's move to seek out emergency funding from the Bank of England. The FTSE 100 closed down 1.7%, or 106.50 points, to end at 6,182.80. The French CAC-40 slid 1.8% to 5,439.37. The German DAX 30 dipped just 0.2% to 7,479.85.
In the emerging markets, the Bovespa in Brazil lost 0.6% to 54,342 while the IPC index in Mexico was down 1% at 29,794. The RTS index in Russia slipped 1.4% to 1915 and the ISE National 30 index in Turkey fell 0.2% to 63,900.
Asian stocks fell for a second day in a row after E*Trade and Bank of America said fallout from the subprime-mortgage crisis will hurt earnings. Mitsubishi UFJ Financial was set for its biggest drop in a month, while National Australia Bank slid to a six-week low.
Toyota and Hynix Semiconductor declined on speculation that widening mortgage losses will hurt demand for their products in the world's largest economy.
The Nikkei in Tokyo was down 284 points at 15,846 while the Hang Seng in Hong Kong fell 119 points to 24,479. The Kospi in Seoul dropped 20 points to 1851 while the Straits Times in Singapore shed 13 points to 3462 and the Taiex in Taiwan was down 131 points to 8899.
Markets closed lower in a choppy trading session led by fall in IT stocks. Subex led the IT stocks down by announcing a cut in its guidance for FY08 due to postponement of capex commitments by a US customer. Weakness was also seen in other major equity indices across the globe with Asian and European markets trading lower. After a positive start, indices swung between green & red territory in a range but closed near day’s low on back of selling pressure in index heavyweights like ICICI Bank, Infosys and HDFC. IT, Realty and Banking stocks were among the major losers. While, Metal and FMCG stocks ended on a firm note. Finally, the 30-share Sensex closed at 15504, down by 99 points after touching day’s high of 15726 and a low of 15467. NSE Nifty fell by 23 points to close at 4495.
ABAN advanced by nearly 2% to Rs3094 after the company received order from ONGC worth Rs20bn. The scrip touched an intra-day high of Rs3145 and a low of Rs3055 and recorded volumes of over 2,71,000 shares on NSE.
Tata Investment Corporation was locked at 20% upper circuit after Tata Sons proposed to make an open offer for 29.3% equity stake in Tata Investment Corporation at Rs600 per share, a 33% premium to Friday’s closing of Rs450.
Fresh buying was seen across the sugar stocks in a highly choppy market. Bajaj Hind was up by over 5% to Rs147, Balrampur Chini was up by 5% to Rs67 and Renuka Sugar was up by 3% to Rs553.
Profit booking brought the banking stocks lower. After a positive start, select banking stocks slipped into red. ICICI Bank was down by over 1% to Rs895, PNB was down by 1% to Rs488 and Orient Bank was down by 2% to Rs2211
IT stocks continued its downtrend amid concerns about wage inflation and rupee's appreciation. Infosys fell by 1.7% to Rs1805, TCS dropped over 2% to Rs998 and Satyam Computer declined by 1.8% to Rs423.
Indian Hotels has acquired a 10% stake in US-based Orient Express Hotels for Rs8.5bn. Orient Express owns & manages 35 hotels across the world, beside luxury trains and cruises.
SAIL and ILF&S Infrastructure Development Corp will develop, operate and maintain SEZ at Salem, Tamil Nadu for steel sector.
Indian pharma companies including Ranbaxy, Wockhardt and Sun Pharma are in a race to acquire US based Par Pharmaceutical.
Reliance Communications and Bharti Airtel are among the 12 companies to bid for Qatar’s second mobile licence.
US private equity major Blackstone plans to invest over $1bn in Indian real estate, in association with Nagarjuna construction.
Among the other stocks to watch out for: JP Associates, Mangalam Cements, Moser Baer and HDIL.
Finance Ministry has decided to refund service tax paid by exporters on 4 non-input services such as services by major ports, minor ports, road transport from ICD to port and rail transport from ICD to port.
The Government has ruled out the January-February General Election due in 2008,assuming a lower voter turnout to April-May.
Fund Activity:
FIIs were net buyers of Rs943.4mn (provisional) in the cash segment on Monday and the local institutions pulled out Rs1.41bn. In the F&O segment, foreign funds were net sellers of Rs9.31bn.
On Friday, FIIs were net buyers to the tune of Rs11.59bn in the cash segment. Mutual Funds were net sellers of Rs2.16bn on the same day.
Upper Circuit:
RIIL, Hindustan Motors, Bartronics, Marksans, Bombay Burmah, Prakash Industries, IID Forgings, Jai Corp and Advani Hotels.
Major Bulk Deals:
ABN AMRO Bank has picked up Adhunik Metaliks; Citigroup has sold Centurion BoP while an investment arm of Narottam Sekhsaria has bought the shares; Bear Stearns has purchased more shares of Ganesh Forgings; Reliance MF has sold Hindustan Motors; UBS has bought Milkfood; Merrill Lynch has picked up Temptation FoodsCrude prices settle above $80
Crude prices close rise on anticipation that oil and gasoline inventories extended declines
Crude oil future prices once again rose today and reached another all time new high. Crude prices closed above $80/barrel for the second time after traders continued with their speculation that U.S. oil and gasoline stockpiles extended declines as refiners slowed operations.
For the day ending Monday, 17 September, 2007, crude-oil futures for light sweet crude for October delivery closed at $80.57/barrel (higher by $1.47/barrel or 1.9%) on the New York Mercantile Exchange.
The contract had dropped to a low of $78.80 early in the session but then rebounded as high as $80.70
The weekly report by Energy Department is expected to show U.S. oil stockpiles fell 2 million barrels last week, the 10th decline in 11 weeks. This perked up prices today. Prices also got a boost that an interest rate cut tomorrow by Federal Reserve will boost energy demand across the country.
Earlier last week, OPEC planned to boost daily oil production by 500,000 barrels. OPEC's production target is 27.2 million barrels a day, beginning 1 Nov. OPEC, has decided to raise their daily output by 500,000 barrels per day, starting 1 November.
Goldman Sachs says oil will reach $85 by year end
Natural gas rose in New York to the highest in a month amid speculation hedge funds would increase purchases, driving up prices in the fourth quarter. Gas for October delivery rose 37.4 cents (6%) to settle at $6.653 per million British thermal units.
Against this backdrop, October reformulated gasoline added 0.78 cent to close at $2.0442 a gallon, while heating oil for October delivery added 2.09 cents to end at $2.2287 a gallon.
Today, Goldman Sachs said its analysts raised their year-end forecast for oil prices to $85 a barrel for 2007 and pegged the year-end price at $95 a barrel for 2008.
Attacks on oil facilities in Nigeria have curtailed shipments and tight supplies from OPEC have bolstered crude prices this year. As per the U.S. Energy Information Administration, tight global energy supplies are expected to keep energy prices high through 2008.
Patni - no stake sale
Mumbai-based Patni Computer System’s stake sale has been stalled, perhaps indefinitely, according to sources close to the development.
The reason for the delay has been attributed to a lack of “common meeting ground” between the brothers. “While the two brothers kick-started the stake sale, they now do not want to dilute their entire stake in the company and want to continue having some rights and privileges in the company,” said the source.
It has been rumoured that private equity players such as the Texas Pacific Group and Apax Partners were in the final lap of purchasing the shares of the two Patni brothers and that due diligence was in progress.
The two Patni brothers — Ashok and Gajendra — who want to sell their stake, together own about 29 per cent stake in the company, which is the country’s sixth largest IT services company. While General Atlantic Partners, which holds a 16.38 per cent stake in the company, has no plans to exit in the immediate future, as a financial investor, it will consider a stake sale if the price is attractive. Other institutions holding stake in the company include Merrill Lynch and UBS. However, any stake sale will be possible only after receiving Narendra Patni’s consent since he has the first right of refusal. Sources said that even if Narendra Patni did agree to a stake sale by his brothers, he was unwilling to give up control over the company. The company’s stock today closed at Rs 442.25 on the BSE – down 2.21 per cent over the previous close. The stock reached its 52-week high of Rs 572 on May 29.
An increased focus on margin improvement during the previous few quarters resulted in the IT major posting a net income (consolidated) of Rs 134.7 crore ($33.2 million) for the second quarter ended June 30, 2007 — an increase of 98.9 per cent compared with Rs 76.6 crore ($16.7 million) for the same quarter last year. Revenues for the quarter touched Rs 662.8 crore ($163.3 million) — a rise of 14.2 per cent from Rs 656 crore ($143 million) year-on-year.
India Technicals
Nifty — The index opened on a flat note and tested 4549 in opening trade, after which it drifted down throughout the session. It ended the day down 31 points.
Range bound trading — The index is stuck in a trading band of 4549-4446 for the past 11 trading sessions. Resistance is seen at the upper end of the range with support around the lower end of the range. If the index closes below the 10 dma at 4502, it could decline towards 4446 levels.
Conclusion — Expect range-bound trading with intra day declines towards 4446.
Supreme Infrastructure India fixes price band for IPO
At Rs 95 - 108 a share
Supreme Infrastructure India has set a price band of Rs 95-108 per share for its forthcoming initial public offer.
The offer will open on 21 September 2007 and will close on 26 September 2007. The offer represents 25.05% of the company's post-issue paid-up capital.
Consolidated Construction Consortium IPO opens on 18 September 2007
Price band Rs 460-510 per share
Consolidated Construction Consortium is likely to raise Rs 190 crore from its initial public offering of 37 lakh equity shares of Rs 10 each.
The company has fixed the price band of the 100% book build issue at Rs 460-510 per share. At the floor price the company would raise Rs 170 crore. The issue opens on Tuesday, 18 September 2007 and will close on Friday, 21 September 2007.
The issue would constitute 10.01% of the fully diluted post issue paid-up capital.
The company intends to use the proceeds to finance the acquisition of construction infrastructure, investment in subsidiaries, expenditures towards its skill and management development centre, and repayment of loans.
Consolidated Construction’s order book stood at over Rs 2,000 crore as on 31 July 2007. For year ended March 2007, it reported net profit of Rs 47.68 crore, on total income of Rs 868 crore.
The company undertakes turnkey building contracts for corporate, infrastructure and realty players. It has clients in sectors such as IT, manufacturing, retailing and education.
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