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Monday, September 24, 2007
Post Market Commentary
The market closed the session on a strong positive note as BSE Sensex surged by 281.6 points to close at 16,845.83 and Nifty grew by 94.65 points to close at 4,932.20.The BSE mid cap and Small cap closed firmly as it was up by 110.22 points and 68.13 points at 7,310.14 and 8,963.43 respectively.
BSE Metal index surged by 217.71 points to close at 13,030.47 as Jindal steel (5.34%), SAIL (2.72%), Sterlite industries (2.32%), Hindalco (1.89%), JSW steel (1.76%) and Tata steel (1.09%) closed in green.
BSE bankex index grew by 221.65 points to close at 8,961.49 as Andhra bank (5.42%), PNB (5.01%), BOB (2.58%), Allahabad bank (4.01%), ICICI bank (3.18%), HDFC bank (1.78%) and SBI (1.38%) closed higher.
BSE oil & gas index advanced by 311.12 points to close at 9,651.17 as RPL (8.03%), GAIL (7.11%), Reliance industries (3.62%), CAIRN India (3.57%), HPCL (2.46%) and BPCL (1.25%) closed higher.
BSE Capital goods index closed firmly as it was up by 317.54 points at 14,837.71 as Jyoti structures (6.17%), Areva (4.76%), L&T (4.09%), Crompton greaves (3.39%), BHEL (2.24%), Siemens (0.78%) and ABB (0.33%) closed in positive.
BSE IT index closed lower by 78.51 points at 4,349.83 as Infosys (3.22%), Satyam (2.32%), Patni computers (2.02%), Tech Mahindra (1.22%) and TCS (0.89%) closed lower.
BSE Health Care Index closed up by 8.99 points at 3,663.23 as Opto circuits (5.82%), Fortis (3.97%), Glennmark (3.39%), Ranbaxy (2.75%) and Novartis (1.17%) closed in positive.
BSE FMCG index closed flat at 2,153.57. United breweries (10.47%), Marico (2.70%), HUL (2.15%), Colgate (1.06%) and Dabur (0.60%) closed higher.
Market Close: New high.. headed up !
After recording highest gains during last week market continued to extend its gains. Reliance group companies, Oil, Banks and Metal stocks contined to support the index. But market gave some of its earlier gains on profit booking however eventually managed to keep its head up to make yet another all time high. Open Interest made a record and hit 1 lakh crore mark. This will be the biggest series ever rolled over on F&O expiry day. Energy & Power stocks continued to hog the limelight. Techies stocks still under selling pressure due to strong rupee at 39.77 against Dollar. Europe was a little cautious and is trading almost flat.
Sensex ended up by 272 points at 16836. It was helped up by gains in REL. ENERGY (1092+8.22 percent), MARUTI SUZUKI (980,+5.5 percent), NTPC (196,+5 percent), L&T (2900+4.2 percent) and RELIANCE (2352.80,+3.45 percent). Restricting the gains were INFOSYS (1760, 3.37 percent), Satyam (407.45, 2.72 percent).
HDFC reduced new home loans by 50 bps. The home loan rate cut is for disbursements up to October. It will decide on continuation of rate cut post announcement of the credit policy. The decision has been taken in view of the lower cost of funds, the benefit of which is being passed on to the customers. HDFC is not alone in this venture. Bank of Baroda too has cut its home loan rate for Rs 20 lakh loan from 10.75 % to 10.25 per cent for tenure of 20 years. Similarly a host of large PSU banks including the State Bank of India, Union Bank and Punjab National Bank are all looking at cutting home loan rates by nearly half a percentage point. However ICICI Bank is currently not looking at slashing rates. According to sources cost of funds is still high and hence there is as of now no scope to offer lower rates even temporarily for the festive season. The stock performed well on the back of news and ended marginally higher.
Low budget carrier Air Deccan lost market share in July-August monsoon season this year to 16.1% down by 2 % point?s month on month basis. SpiceJet?s share stood at 7.7% during the month as against 7.7% in June. The hike in fairs is probably the reason.. Jet the market leader increased its share to 22.7% as compared to 22% in the previous month. Kingfisher increased its market share to 13% in July as compared to 12.9% in June. The market share of Indian Airlines went up to 20.5% in July as compared to 19.8% in June. Domestic airlines carried 24.85 million passengers during January-July period registering a growth of 37.81%. Spice is where our eyes on.. Spicejet has revised its fleet size expansion plans for FY08. It will add 6 new aircraft against 8 new planned earlier. It expects 2 aircrafts to be back from Transaaria which were leased out in July 2007. Near term high crude prices is something which will weigh. But an industry growing by 35%+ is in now way to be ignored. Spicejet was more benefited which ended up by 5% while Air Deccan was marginally impacted by the news.
Technically Speaking: Markets traded well on the back of strong sentiment. Sensex touched intraday high of 16869 and low of 16599. Over all market turnover was fantastic for the day at Rs 4715 Cr. Market breadth was in favor of Advances. The Decliners stood at 760 while Advances was 1971. Sensex is in a runaway mood. The trend is up and no negative signs as of now, trade up.
Sensex, Nifty strike all-time highs
The market kept on advancing as the day progressed on steady buying demand for index pivotals throughout the day, except for an hiccup in early trade. Turnover was healthy today and it crossed Rs 7,500 crore on BSE. Both the niche indices BSE Sensex and S&P CNX Nifty struck all time highs. Sensex is now eyeing 17,000 and the S&P CNX Nifty is eyeing 5,000 mark.
European markets which opened after Indian market, were mixed. Asian markets which opened before Indian market settled higher today, 24 September 2007. US markets posted gains on Friday, 21 September 2007.
The 30-shares BSE Sensex was up 281.60 points or 1.70% to 16,845.83, an all time closing high. It had opened on an upbeat note at 16,697.89 tracking firm global cues. Its low for the day was at 16,599.66. It surged to an all time high of 16,869.64 in late trade. Sensex oscillated 268.98 points for the day
From a recent low of 13,989.11 on 21 August 2007, Sensex has surged 2856.72 points or 20.42% in just 24 trading days to current 16,845.83.
The S&P CNX Nifty was up 94.65 points or 1.96% to 4,932.20, an all time closing high. It struck an all time high of 4,941.15. The Nifty September 2007 futures settled at 4938, a premium of 5.80 points as compared to spot closing.
Despite solid rally in market, the market breadth was negative on BSE with 1454 shares declining as compared to 1302 that advanced. 51 remained unchanged. The breadth was strong in opening trade.
The BSE Mid-Cap index rose 1.53% to 7,309.84. It hit an all-time high of 7,321.02 today. BSE Small-Cap index gained 0.77% to 8,963.48. The index hit record high of 9,013.35 today.
The total turnover on BSE amounted to Rs 7,744 crore as compared to Rs 8,279.52 crore on Friday, 21 September 2007.
The NSE’s F&O turnover amounted to Rs 79397.68 crore as compared to Rs 75928.77 crore on Friday, 21 September 2007.
All the sectoral indices on BSE posted gains except the BSE IT index. BSE Realty index (up 2.03% to 9,369.68), BSE Auto Index (up 2% at 5,297.26), BSE PSU index (up 2.30% to 7,959.92), BSE Metal Index (up 1.70% at 13,030.47), BSE Capital Goods Index (up 2.19% at 14,837.71), BSE Oil and Gas Index (up 3.33% at 9,651.17) outperformed the Sensex.
However BSE TecK index (up 0.09% to 3,641.41), BSE Consumer Durables index (up 0.17% to 4,756.01), BSE FMCG Index (up 0.03% at 2,153.57), BSE Health Care Index (up 0.25% at 3,663.23), BSE Bankex (up 2.54% at 8,961.49) and BSE IT Index (down 1.77% at 4,349.83) were underperformers
Among the 30-member Sensex pack, 25 advanced while the rest declined.
India’s top private sector utility company in terms of revenue Reliance Energy (REL) surged 8.17% to Rs 1092.10 on 21.52 lakh shares. The stock hit all-time high of Rs 1130.70 in intra-day trade. It was the top gainer from Sensex pack. As per reports, the government cleared the two transmission line projects of REL worth Rs 3,500-crore projects which includes the western region system strengthening (WRSS) II and the Parbati-Koldam hydro projects in Himachal Pradesh. These projects were delayed due to issues raised by the public-private partnership appraisal committee (PPAC).
National Thermal Power Corporation, the country’s largest power generation company by net sales jumped 4.96% to Rs 196.80 on 46.18 lakh shares. It replaced Dabur India in the S&P CNX Nifty index from today.
India’s top small-car market by market share, Maruti Suzuki India galloped 7.47% to Rs 999. Last week, Foreign Investment Promotion Board (FIPB) cleared Maruti's proposal to form a joint venture for setting up an exhaust parts manufacturing facility in Haryana with Japan's Futaba Industrial Company. Futaba will hold 51% in the venture.
Bharti Airtel, India’s largest listed cellular services provider by market share rose 2.52% to Rs 941.50. As per reports, it has got licence to start Direct-To-Home (DTH) services in the country and announced an investment of Rs 150 crores in the first phase to launch nation-wide operations, a move that would bring in much required competition in the DTH segment. Also another set of reports state that Bharti Airtel may get extra spectrum for Delhi and Mumbai under the existing subscriber-base norms.
India’s largest power equipment maker in terms of revenue Bhel gained 1.82% to Rs 2002. It hit lifetime high of Rs 2025. As per recent reports, Bhel it is looking at mergers and acquisition to fuel inorganic growth and it targeting a turnover of Rs 45,000 crore by 2012.
Banking pivotals advanced on fresh buying. ICICI Bank (up 3.19% to Rs 996), HDFC Bank (up 2.37% to Rs 1354.05), and State Bank of India (up 0.75% to Rs 1821.90), edged higher.
India’s largest private sector entity by market capitalisation and oil refiner Reliance Industries (RIL) rose 3.63% to Rs 2357 on 7.87 lakh shares. It hit an all time high of Rs 2375 in intra-day trade. RIL said on Saturday, 22 September 2007 that it has struck oil in the deepwater block KG-D4 located in the Krishna Basin. The commercial viability of the discovery is being evaluated. RIL holds 100% participating interest in this block, which spans over an area of 8100 sq. kms. The rumors about RIL’s oil find had already hit the market on Friday, 21 September 2007.
India’s second largest telecom services provider market capitalisation Reliance Communications jumped 3.26% to Rs 598.25 on high volumes of 38.27 lakh shares. A block deal of 14.10 lakh shares was struck on at Rs 590 per share in early trade on BSE.
Larsen & Toubro (L&T), the country’s second largest engineering & construction company in terms of market capitalisation, soared 4.49% to Rs 2908. As per recent reports, it is close to acquiring a stake in Feedback Ventures, a leading integrated infrastructure services firm. The stock hit an all time high of Rs 2910 on BSE
IT shares were weak throughout the day. India’s second largest software services exporter Infosys Technologies was the top loser from Sensex pack. It slipped 3.30% to Rs 1761.90 on 2.83 lakh shares
Other IT pivotals, Satyam Computers (down 2.76% to Rs 407.30), TCS (down 1.08% to Rs 1004), were not spared either.
ITC (down 1.47% to Rs 188) and Grasim (down 0.07% to Rs 3445) were the other losers from Sensex pack.
IFCI was the top traded counter on BSE with turnover of Rs 531.37 crore followed by Reliance Natural Resources (Rs 454.34 crore), Reliance Petroleum (Rs 368.57 crore), DLF (Rs 242.13 crore), and Reliance Energy (Rs 232.84 crore).
Reliance group stocks were in spotlight for second straight day on momentum buying. Reliance Petroleum (up 8.10% to Rs 167.50), Reliance Natural Resources (up 22.03% to Rs 93.60), Reliance Capital (up 1.90% to Rs 1571.25), Reliance Industrial Infrastructure (up 10% to Rs 1147.40), Adlabs Films (up 1.12% to Rs 555) and IPCL (up 3.25% to Rs 465.50) surged.
Adhunik Metaliks jumped 6.40% at Rs 99 after its board approved acquiring a majority stake in V Cube Forge (India) for an undisclosed amount. Pune-based V Cube Forge manufactures forged and machined parts for automobiles, railways, and aerospace.
IFCI surged 19.32% to Rs 98.80 on huge volumes of 5.68 crore shares. Nearly 1.10 crore shares changed hands through multiple block deals on BSE and NSE combined.
IVRCL Infrastructures & Projects slipped 1.25% to Rs 409.90. It received new orders worth Rs 394.24 crore. The Pune region of the company has received these orders for its building division and for power division.
Hindustan Petroleum Corporation was up 2.32% to Rs 256.10 on reports that Lakshmi Mittal may buy a stake in the unit of the company, Prize Petroleum.
Tata Tea rose 0.10% to Rs 785 on reports that the firm is in talks to buy UK-based speciality tea company Liberty Tea. The move is aimed at expanding company’s presence in the global beverages market. Unlisted Liberty Tea is a popular brand in Europe.
Unitech advanced 3.90% to Rs 350.55 after it announced after trading hours on Friday, 21 September 2007, that it would enter mobile telephone services in services in 22 out of 23 circles of the country.
ING Vysya Bank surged 7.17% to Rs 262.45 on reports that it is in talks with Centurion Bank of Punjab and Kotak Mahindra Bank for acquisitions.
GAIL soared 7.23% to Rs 375.75 on reports that it is considering an issue of bonus shares to its equity stakeholders.
Hindustan Construction Company rose 2.37% to Rs 146.75, after the company said its joint venture with Alphine Mayreder Bau GMBH and Samsung Corporation has received a contract from Delhi Metro Rail Corporation, Delhi for design and construction of two underground stations and tunnel between New Delhi station and Talkatora Garden. The value of the order is worth Rs 774.64 crore. HCC's share is the total value of the contract is 33% to Rs 255.63 crore.
Syndicate Bank moved up 1.83% to Rs 91.60 on reports that the state-run bank is planning a follow-on public offer (FPO) during this fiscal year, subject to regulatory approvals.
Aftek rose 3.63% to Rs 77, after the company said Goldman Sachs Investments Mauritius has acquired 20 lakh shares or a 2.29% in the company to raise its stake to 5.74%.
European markets which opened after Indian market, were mixed today, 24 September 2007. Key benchmark indices in France (up 0.12% to 5,707.67), and United Kingdom (up 0.51% to 6,489.40) rose. However, Germany’s DAX was down 0.12% to 7,785.44
Asian markets which opened before Indian market settled higher today, 24 September 2007. Hong Kong's Hang Seng (up 2.52% at 26,495.15), Shanghai Composite (up 0.56% to 5,485.03), and Singapore's Straits Times (up 2.73% at 3,639.02) advanced. Stock markets in Japan, South Korea and Taiwan were closed for public holidays.
US stocks posted steady gains on Friday, 21 September 2007 capping a strong week for Wall Street, as investors drew confidence from strong results at Oracle Corp. and a continued sense that lower interest rates should help bolster the economy. The Dow Jones industrial average rose 53.49, or 0.39%, to 13,820.19. Broader stock indicators also rose. The Standard & Poor's 500 index advanced 7.00, or 0.46%, to 1,525.75, while the Nasdaq Composite index rose 16.93, or 0.64%, to 2,671.22.
Indian market may, however, turn volatile this week ahead of the expiry of September 2007 futures & options (F&O) contracts on Thursday, 27 September 2007.
Crude oil prices dipped on Monday, 24 September 2007 as oil and gas producers in the Gulf of Mexico restored more output after a mild storm triggered evacuation and production cuts. US crude for November delivery fell 22 cents to $81.40 a barrel.
As per the data released on Friday, 21 September 2007, inflation based on the wholesale-price-index rose 3.32% for the week ended 8 September 2007 as against 3.52% in the previous week.
Firm global indices keep market buoyant
The market exhibited strong optimism as buoyancy in overseas markets triggered a major rally across the board. After registering strong gains on Friday, the Sensex resumed with a positive gap of 134 points at 16698. However, profit booking in heavyweights, information technology, pharma and cement stocks dragged the Sensex to its day's low of 16600. But, the Sensex recovered on hectic buying at lower levels and set another all-time high of 16870. Firm close in other Asian indices also helped the market to rally. The Sensex finally closed the session with gains of 282 points at 16846. The Nifty closed by adding 95 points at 4932.
Among the sectoral indices, the Oil & Gas Index led the upsurge with gains of 3.33% at 9651 followed by the BSE Bankex (up 2.54% at 8961), the BSE PSU Index (up 2.30% at 7960) and the BSE Realty Index (up 2.03% at 9370). However, the market breadth was negative. Of the 2,837 stocks traded on the BSE 1,467 stocks declined, 1,313 stocks advanced and 57 stocks ended unchanged.
Out of the 30 Sensex stocks, 23 managed to end in the green while seven stocks ended with losses. Reliance Energy was the leading gainer and soared 8.33% at Rs1,094. Maruti Udyog jumped 5.45% at Rs980, NTPC shot up by 4.83% at Rs197, L&T advanced 4.09% at Rs2,897, Reliance Industries moved up by 3.62% at Rs2,357, Reliance Communication added 3.26% at Rs598 and ICICI Bank gained 3.18% at Rs996. Among the laggards, Infosys dropped 3.22% at Rs1,763, Satyam Computer shed 2.32% at Rs409, ITC declined by 1.55% at Rs188 while TCS, Grasim, Dr Reddy's Lab and Cipla closed with marginal losses.
Over 5.69 crore IFCI shares changed hands on the BSE followed by Tata Teleservices (5.32 crore shares), Reliance Natural Resources (4.92 crore shares), Ispat Industries (4.81 crore shares) and Himachal Futuristic Communication (3.55 crore shares).
IFCI registered a turnover of Rs531 crore on the BSE followed by Reliance Natural Resources (Rs457 crore), Reliance Petroleum (Rs369 crore), DLF (Rs242 crore) and Reliance Energy (Rs234 crore).
Hop on, its a joyride
The US Federal Reserve’s move to cut interest rates by 50 basis points is its first in the past four years. It is a reaction to the disruptions triggered by the US sub-prime crisis. This will set the tone for the Indian market to break out and move to the next orbit.
Markets across the globe cheered this move, and India was no exception. The Sensex closed above the 16000 mark for the first time on Wednesday. The question uppermost on investors’ mind is: will the Sensex sustain these levels? We remain optimistic about India because of fundamental or macro-economic reasons, as well as technical or liquidity reasons.
Macro-economically speaking, India has never had it so good. We have entered the 9%-plus real GDP growth band, and it looks like these growth rates will be sustained. Apart from agriculture, both manufacturing and services are firing on all cylinders. This growth will have a trickle-down effect on the rest of the economy.
Travel anywhere in India, and you will see the impact of retail spending and the telecom revolution. However, infrastructure remains a big bottleneck. Certain states have woefully inadequate infrastructure, but it looks like slowly, the powers to be have realised the need to invest in this sector. We’re optimistic that in the medium term, this issue will be resolved. Commodity prices are also stabilising after being volatile in the past. This will benefit all old economy stocks.
India was relatively unaffected by the subprime mess. The only visible impact was in FII selling, primarily due to hedge fund redemptions. The Fed rate cut signals that the phase of rising interest rates is finally ending and from now onwards, interest rates will stabilise, if not fall.
The Reserve Bank of India (RBI) is expected to follow suit. Inflation rate has fallen to 3.5%, the lowest in almost a year-and-a-half. Hence, chances of RBI reversing its stance on interest rates are quite high. A fall in interest rates will revitalise all interest rate-sensitive sectors like housing, banking and automobiles.
With the Fed rate cut, emerging markets will re-emerge as the investment destination of choice. Decoupling notwithstanding, a shift of funds from dollar to non-dollar assets is expected, with a growing interest in high-growth destinations like India and China. We expect the domestic capital market to see a surge in foreign funds, which spells good news for both stock prices and indices.
Earlier, foreign money was the first to shy away from emerging markets during global upheavals. FIIs’ intense selling pressure, coupled with drying up of liquidity, is a double whammy. But the case is different this time in India due to deep domestic liquidity.
The direction of the market is no longer determined solely by FII inflows — as was the case in the past — but also by domestic institutions like mutual funds and life insurance companies, which have ample cash to invest in the market and do bottom-fishing.
These domestic institutions are one of the prime reasons why the market remained stable, despite FIIs being net sellers to the tune of $2 billion during July-August ’07. Hence, the domestic stock market is no longer as dependent on ‘foreign funds’ as it used to be, since Indian institutions themselves are now of a size to be reckoned with.
A surging economy, coupled with healthy corporate numbers, will set the tone for the market to reach new highs. The only spoilsport can be political instability. Domestic consumption, capex cycle and the Indian outsourcing story will be the key investment themes.
Technically speaking, the market has broken free from the critical resistance levels of 15973. So, too many eyebrows may not be raised if the Sensex breaches the 18000 mark on ‘Mahurat’ trading day. Be ready to enjoy fireworks this Diwali as the best is yet to come. Come and join the joyride!
Prabhudas Lilladher - Tanla Solutions
Prabhudas Lilladher has buy rating on Tanla Solutions and revised its price target to Rs 944.
"We expect Tanla to clock revenues of Rs 410 crore in 2007-08 (Apr-Mar) and Rs 620 crore in 2008-09. At the current market price of Rs 614, the stock trades at 19.8 times the 2007-08 estimate earnings per share of Rs 31.1 and at 13 times 2008-09 estimate earnings per share of Rs 47.2. We have increased the target price as we have factored in the contribution from Ireland and we believe that this stock is on a path of re-rating," the brokerage said in its Sep 21 report.
The company has forayed into Ireland. "Tanla has tied up with all the Irish operators which include 3, O2, Vodafone and Meteor. The total addressable market for Tanla is around Rs 1,000 crore. Revenues would start flowing in from second quarter of 2007-08. The margins in Ireland will be at par with the company level as there is no major capex involved here," the report adds.
Tanla’s US subsidiary has begun operations and revenues are likely to flow in three months. It is also looking for acquisitions there.
Sensex spurts 272 points
The market kept on advancing as the day progressed on steady buying demand for index pivotals throughout the day, except for an hiccup in early trade. Turnover was healthy today and it crossed Rs 7,500 crore on BSE. Both the niche indices BSE Sensex and S&P CNX Nifty struck all time highs.
European markets which opened after Indian market, were mixed. Asian markets which opened before Indian market advanced today, 24 September 2007. US markets posted gains on Friday, 21 September 2007.
The 30-shares BSE Sensex was up 271.86 points or 1.64% to 16,836.09, as per provisional closing. It had opened on an upbeat note at 16,697.89 tracking firm global cues. It’s low for the day was at 16,599.66. It surged to an all time high of 16,869.64 in late trade.
The S&P CNX Nifty was up 93.35 points or 1.93% to 4,930.90 as per provisional closing. It struck an all time high of 4,941.15
Despite solid rally in market, the market breadth was negative on BSE with 1454 shares declining as compared to 1302 that advanced. 51 remained unchanged. The breadth was strong in opening trade.
As per provisional closing, the BSE Mid-Cap index rose 1.53% to 7,309.84. It hit an all-time high of 7,321.02 today. BSE Small-Cap index gained 0.68% to 8,955.59. The index hit record high of 9,013.35 today.
The total turnover on BSE amounted to Rs 7,744 crore as compared to Rs 6,040 crore by 14:30 IST
Among the 30-member Sensex pack, 25 advanced while the rest declined.
India’s top private sector utility company in terms of revenue Reliance Energy (REL) surged 8.17% to Rs 1092.10 on 21.52 lakh shares. The stock hit all-time high of Rs 1130.70 in intra-day trade. It was the top gainer from Sensex pack. As per recent reports, REL is scouting for coal mines in Indonesia, Australia, Africa and Mozambique and it sees infrastructure projects such as road and rail transport as key growth drivers.
National Thermal Power Corporation, the country’s largest power generation company by net sales jumped 4.96% to Rs 196.80 on 46.18 lakh shares. It replaced Dabur India in the S&P CNX Nifty index from today.
India’s top small-car market by market share, Maruti Suzuki India galloped 7.47% to Rs 999. Last week, Foreign Investment Promotion Board (FIPB) cleared Maruti's proposal to form a joint venture for setting up an exhaust parts manufacturing facility in Haryana with Japan's Futaba Industrial Company. Futaba will hold 51% in the venture.
Bharti Airtel, India’s largest listed cellular services provider by market share rose 2.52% to Rs 941.50. As per reports, it has got licence to start Direct-To-Home (DTH) services in the country and announced an investment of Rs 150 crores in the first phase to launch nation-wide operations, a move that would bring in much required competition in the DTH segment. Also another set of reports state that Bharti Airtel may get extra spectrum for Delhi and Mumbai under the existing subscriber-base norms.
India’s largest power equipment maker in terms of net sales Bhel gained 1.82% to Rs 2002. It hit lifetime high of Rs 2025. As per recent reports, Bhel it is looking at mergers and acquisition to fuel inorganic growth and it targeting a turnover of Rs 45,000 crore by 2012.
Banking pivotals advanced on fresh buying. ICICI Bank (up 3.19% to Rs 996), HDFC Bank (up 2.37% to Rs 1354.05), and State Bank of India (up 0.75% to Rs 1821.90), edged higher.
India’s largest private sector entity by market capitalisation and oil refiner Reliance Industries (RIL) rose 3.63% to Rs 2357 on 7.87 lakh shares. It hit an all time high of Rs 2375 in intra-day trade. RIL said on Saturday, 22 September 2007 that it has struck oil in the deepwater block KG-D4 located in the Krishna Basin. The commercial viability of the discovery is being evaluated. RIL holds 100% participating interest in this block, which spans over an area of 8100 sq. kms. The rumors about RIL’s oil find had already hit the market on Friday, 21 September 2007.
India’s second largest telecom services provider market capitalisation Reliance Communications jumped 3.26% to Rs 598.25 on high volumes of 38.27 lakh shares. A block deal of 14.10 lakh shares was struck on at Rs 590 per share in early trade on BSE.
Larsen & Toubro (L&T), the country’s second largest engineering & construction company in terms of market capitalisation, soared 4.49% to Rs 2908. As per recent reports, it is close to acquiring a stake in Feedback Ventures, a leading integrated infrastructure services firm. The stock hit an all time high of Rs 2910 on BSE
IT shares were weak throughout the day. India’s second largest software services exporter Infosys Technologies was the top loser from Sensex pack. It slipped 3.30% to Rs 1761.90 on 2.83 lakh shares
Other IT pivotals, Satyam Computers (down 2.76% to Rs 407.30), TCS (down 1.08% to Rs 1004), were not spared either.
ITC (down 1.47% to Rs 188) and Grasim (down 0.07% to Rs 3445) were the other losers from Sensex pack.
European markets which opened after Indian market, were mixed today, 24 September 2007. Key benchmark indices in France (up 0.18% to 5,710.71), and United Kingdom (up 0.51% to 6,489.40) rose. However, Germany’s DAX was down 0.17% to 7,781.02
Asian markets which opened before Indian market advanced today, 24 September 2007. Hong Kong's Hang Seng (up 1.12% at 26,133.46), Shanghai Composite (up 0.56% to 5,485.03), and Singapore's Straits Times (up 2.73% at 3,639.02) advanced. Stock markets in Japan, South Korea and Taiwan were closed for public holidays.
US stocks posted steady gains on Friday, 21 September 2007 capping a strong week for Wall Street, as investors drew confidence from strong results at Oracle Corp. and a continued sense that lower interest rates should help bolster the economy. The Dow Jones industrial average rose 53.49, or 0.39%, to 13,820.19. Broader stock indicators also rose. The Standard & Poor's 500 index advanced 7.00, or 0.46%, to 1,525.75, while the Nasdaq Composite index rose 16.93, or 0.64%, to 2,671.22.
Indian market may, however, turn volatile this week ahead of the expiry of September 2007 futures & options (F&O) contracts on Thursday, 27 September 2007.
Crude oil prices dipped on Monday, 24 September 2007 as oil and gas producers in the Gulf of Mexico restored more output after a mild storm triggered evacuation and production cuts. US crude for November delivery fell 22 cents to $81.40 a barrel.
As per provisional data, foreign institutional investors (FIIs) purchased shares worth a net Rs 762.13 crore, while domestic institutional investors (DIIs) were net sellers of shares worth Rs 277.68 crore on Friday, 21 September 2007
The market posted weekly gains for fifth straight week, with the BSE Sensex surging 960.43 points or 6.16% to 16,564.23 in the week ended Friday, 21 September 2007. This is the biggest weekly gain ever posted by Sensex. The S&P CNX Nifty rose 319.55 points or 7% at 4,837.55 during the week.
As per the data released on Friday, 21 September 2007, inflation based on the wholesale-price-index rose 3.32% for the week ended 8 September 2007 as against 3.52% in the previous week.
Maytas Infra IPO in Rs 320-370 price band
Maytas Infra, a construction and infrastructure development company, is entering the capital markets with an initial public offering of 8.85 million shares at a price band of Rs 320-370 a share. The company will mobilize Rs 283.20 crore to Rs 327.45 crore at lower and upper end of the price band. The issue will open for subscription on September 27, and will close on October 4, 2007.
The issue will constitute 15.04% of the fully diluted post-issue equity share capital of the company. Out of the total equity float, at least 60% of the issue shall be allocated on a proportionate basis to qualified institutional buyers, out of which 5% would be available for allocation on a proportionate basis to mutual funds.
Incorporated in 1988, Maytas Infra has adopted an integrated business model with a diversified order book. The company has historically focused on the irrigation, road and bridges, and buildings infrastructure sectors, a press release said.
Sensex ends up 272pts at 16,836
The Sensex opened with a significant positive gap of 134 points at 16,698 - up 134 points from the previous close. After extending gains in early trades the index pared some gains and touched a low of 16,600.
The index, thereafter, exhibited steady upmove on the back of unabated buying in heavyweights like Reliance, ICICI Bank, Bharti Airtel, Reliance Communications and NTPC. The index touched a fresh all-time intra-day high of 16,848.
The Sensex finally ended (provisional) with a gain of 272 points at 16,836.
Weekly Technical Analysis
Nifty — The index saw a breakout from its consolidation band and registered handsome gains during the last week’s trading. It closed on a negative note on the opening session of the week after which it saw a sharp rally for the remaning part of the week. It ended the week with gains of 320 points.
Momentum Oscillators — On the daily chart, MACD is in buy mode. RSI (14) – Relative Strength Index is exhibiting a reading of 76.79 (a reading above 70 signifies overbought). Stochastic (5, 3) is in overbought zone but in buy mode.
Momentum oscillators suggest the index can rise furthur from current levels.
Moving Averages — The 50 dma = 4440, 20 dma = 4511, 10 dma = 4591. The index is trading above the averages, which should be considered positive.
Support — The index has support around 4721 (low of 20 September 2007) and 4648 (Breakout level- Previous high [24 July 2007]). Intra-week declines should find support around these levels. A daily close below 4721 can see the index consolidation around 4700 levels.
Higher Levels — The index can test higher levels around 4980.The level of 4980 is the projection level on the upper end of the trendline. (Figure 3)
Conclusion — Stay focused on the upside with support around 4721 on a daily closing basis.
Trading Calls
Nifty (4838) Sup 4789 Res 4875
Buy PFC (206)
SL 202 Target 212, 215
Buy Adlabs (549)
SL 544 Target 560, 563
Buy BHEL (1970)
SL 1955 Target 2005, 2015
Buy GMR Infra (800)
SL 790 Target 827, 832
Sell IVRCL Infra (416)
SL 421 Target 408, 406
Sun outage could reduce speed
There are no speed limits on the road to excellence.
Speed is the name of the game these days, whether its cricket, transport, business or even the stock market. But, the sun outage could be the speed breaker which could aid the bears. Today, we expect a higher opening, and a volatile day ahead.
The bulls were on fire last week, thanks largely to the aggressive rate cuts announced by the Federal Reserve to tackle the housing sector slowdown and avert a bigger crisis. Equity markets rallied across the globe amid optimism that the Fed will swing into action again to pump-prime the economy and revive consumer confidence.
That spells good news for emerging markets like India, as global investors will resume their buying spree of high-yielding assets. In fact, according to Emerging Portfolio Funds Research, investors poured in close to $1.8bn into global emerging markets equity funds during the third week of September. Having said that in Asia (ex-Japan), most of the inflows went into China-centric funds.
Still, India doesn't have to despair, as FIIs have resumed their shopping spree in the past several days. More money will continue to pour into India, given its long-term economic prospects and strong momentum in corporate earnings growth. The rupee is at a nine-year peak, and will remain strong amid relentless inflow of foreign money, both portfolio and direct. As a result, IT shares will remain under pressure.
Though software shares have been out of favour over the past few months, long-term investors could look at top five companies in this space at further declines. As far as the broader market is concerned, we may see the Sensex crossing 17k shortly, but beyond that investors should be careful as valuations are not cheap and most of the good news in already in the price.
Exit stocks that had underperformed recently and rallied last week. Get out of shares that have run too much ahead of fundamentals. Buy them back when they correct in the next two weeks or so. With the F&O expiry scheduled for Thursday, we could face more volatility. Also, with the result season just round the corner, the market may turn choppy.
Peninsula Land's Board has approved the issue up to 6,00,00,000 shares of Rs2 each to Domestic / Foreign Investors / Institutional Investors / Foreign Institutional Investors / Qualified Institutional Buyers, etc. through a public issue / Qualified Institutional Placement and / or any other instruments.
US stocks posted the biggest weekly gain since March, pushing the Dow Jones Industrial Average to within 181 points of a record, after the Federal Reserve cut its benchmark interest rate by 50 basis points.
The Dow gained 0.4% to end at 13,820.19 and the broader S&P 500 index added around 0.5% to 1525.75. The tech-heavy Nasdaq Composite index gained 0.6% to 2671.22.
On the week, the S&P 500 advanced 2.8%, putting the index 1.8% away from its July all- time high. The Dow added 2.8%. The Nasdaq rose 2.7%.
Oracle reported higher quarterly earnings and revenue that topped Wall Street estimates. The business software leader also reported a large jump in sales of new software licenses, that topped forecasts. That gave a boost to technology stocks.
Nike also reported higher quarterly earnings and revenue that beat expectations, thanks to a tax benefit and a boost from the weak US dollar.
Treasury prices rose, bouncing back after several down days. The gain lowered the yield on the 10-year note to 4.62% from 4.7% late on Thursday. COMEX gold for December delivery fell $1 to settle at $738.90 an ounce.
In currency trading, the dollar fell to a new record low against the euro and slipped against the yen. On Thursday, it stood at equal value with the Canadian dollar for the first time in more than 30 years.
US light crude oil for November delivery fell 16 cents to settle at $81.62 a barrel on the New York Mercantile Exchange. The October contract settled the previous day at $83.32, ending at a record high for the fourth session in a row.
European shares advanced. The pan-European Dow Jones Stoxx 600 index rose 0.5% to 376.88. The German DAX 30 closed up 0.8% at 7,794.43, while the UK's FTSE 100 climbed 0.4% to 6,456.70 and the French CAC-40 added 0.2% to 5,700.65.
In the emerging markets, the Bovespa in Brazil gained 1.6% to 57,799 while the IPC index in Mexico rose 0.3% at 30,583. The RTS index in Russia advanced 0.55% to 2026 and the ISE National-30 index in Turkey put on 0.4% at 68,444.
Asian stocks rose for a fourth day, led by raw-materials producers, on expectations of high demand and increase in earnings. Japan, Taiwan and Korea markets are shut today. The Hang Seng Index set new record intraday high of 26,071.57. The Hang Seng was up 0.9% in early minutes.
The Morgan Stanley Capital International Asia-Pacific excluding Japan Index gained 0.3% to 509.18 at 9:59 a.m. in Hong Kong, set for a third straight record. The index rallied 5.6% in the previous three sessions after the Fed cut its key interest rate by half a percentage point to bolster growth in the US. BHP Billiton climbed to a record on speculation that it will announce a large gold discovery.
Key indices scaled new peaks as yet another historic session was marked. The run prolonged led by the Reliance group stocks. RNRL, RPL, RIIL were the visible out performers for the day. Among the sectoral gainers, OIL & Gas was the top gainer followed by Realty index. However, FMCG and Pharma witnessed selling pressure. Finally, BSE 30-share benchmark Sensex ended 216 points higher to close at 16564. NSE Nifty surged 90 points to close at 4837.
RNRL a unit of India's second-largest utility by market value, sky rocketed by over 35% to Rs76 in a single trading session on reports the company has applied for a license to distribute natural gas to households and cars and buses. The scrip has touched an intra-day high of Rs79 and a low of Rs57 and recorded volumes of over 20crore shares on NSE.
Reliance Energy also gained by over 2.5% to Rs1009 after reports stated that the company applied to the oil ministry for permission to sell gas in Mumbai, New Delhi and its suburbs Noida and Gurgaon. The scrip has touched an intra-day high of Rs1033 and a low of Rs982 and has recorded volumes of over 35lakh shares on NSE.
Financial Technology advanced by 1% to Rs2712 after the company secured the approval from CERC to set up a national level power exchange – Indian Energy Exchange. The scrip touched an intra-day high of Rs2808 and a low of Rs2690 and recorded volumes of over 1,00,000 shares on NSE.
Simplex Infrastructures slipped by 1.7% to Rs392. The company announced that they have bagged orders worth Rs8bn in four business segments. The scrip touched an intra-day high of Rs419 and a low of Rs390 and recorded volumes of over 1,00,000 shares on NSE.
Alfa Laval India slipped 1.2% to Rs1021. Reports stated that the company has received a contract worth Rs364.5mn for a black liquor evaporation plant of West Coast Paper Mills. The scrip touched an intra-day high of Rs1039 and a low of Rs1020.
ITC declined by 1.6% to Rs190. According to reports the company has planned addition of a new line expanding its paper division’s capacity by March 2008. The scrip touched an intra-day high of Rs194 and a low of Rs187 and recorded volumes of over 60,00,000 shares on NSE.
Garware Offshore slipped 0.5% to Rs185. Reports stated that the company has allotted 0.5mn shares to shareholders on a preferential basis. The scrip touched an intra-day high of Rs189 and a low of Rs184 and recorded volumes of over 18,000 shares on NSE.
IT stocks witnessed a bounce back on back of value buying. Infosys gained 1.4% to Rs1825, TCS advanced by 1.5% to Rs1017, Wipro gained 1% to Rs438 and Rolta added 5.9% to Rs526.
Stocks in News:
NTPC plans to raise power generation capacity from 27,100MW to 50,000MW by 2012 and targets 50mn ton coal production from captive coal blocks.
Bharti Airtel gets license to start direct-to-home services, to invest Rs1.5bn in the first phase to launch nation-wise operations.
Nalco to raise about Rs9bn of overseas debt to fund the second phase of its expansion program.
The government has cleared two transmission line projects of Reliance Energy; Investments in the projects would be to the tune of Rs35bn.
DLF emerges as the highest bidder at Rs66bn for setting up Tidel-II, the second IT and ITES SEZ in Chennai.
HDFC may cut home loan rates, sees 50 bps reduction in its cost of funds as compared to last month.
JSW Steel plans increasing US pipe output by 75% to 0.35mn ton next year and may increase to 0.5mn ton by March 2009.
Usha Martin group has acquired UK based BPO company Converso. The acquisition is expected to bring synergies in customer care and billing solutions between Ushacomm, Eppixcomm and Converso.
Hindustan Zinc plans major expansion to take its total capacity to one million ton and add 110MW to its total wind power capacity.
Oil companies top in advance tax payment.
PMO in favour of assigning Chiria mines to SAIL; asks Jharkhand government to ensure the same.
Centre may allow Coal India to import about 15mn tons of coal after the announcement of new coal sale policy expected this week.
Fund Activity:
FIIs were net buyers of Rs7.62bn (provisional) in the cash segment on Friday and the local institutions pulled out Rs2.78bn. In the F&O segment, foreign funds were net buyers of Rs13.81bn.
On Thursday, FIIs were net buyers to the tune of Rs16.3bn in the cash segment. Mutual Funds were net buyers of Rs2.33bn on the same day.
Major Bulk Deals:
Standard Chartered MF has bought ACE; Birla MF has picked up Balaji Telefilms; Macquarie Bank and T. Rowe Price have purchased Gujarat NRE Coke; Reliance Industries has bought ICI India while Prudential ICICI has sold it; Bear Stearns has picked up Karuturi Networks; Citigroup has purchased Macmillan while HDFC MF has sold the stock; Citigroup has bought Shree Precoated Steels; Goldman Sachs has sold Visa Steel.
Upper Circuit:
Atlanta, Gremac Infrastructure, McNally Bharat, Ruby Mills, Victoria Mills, IID Forgings, Jai Corp, RIIL.
Lower Circuit:
SSI and Tourism Finance.
Market to continue its rally
Market is expected to continue its recent rally, on positive global cues. Asian indices advanced today, 24 September 2007. Hong Kong's Hang Seng (up 0.84% at 26,061.84), Shanghai Composite (up 0.25% to 5,468.51), and Singapore's Straits Times (up 1.66% at 3,601.08). advanced
Market may however turn volatile ahead of the expiry of September 2007 futures & options (F&O) contracts due on Thursday, 27 September 2007.
US stocks posted steady gains on Friday, 21 September 2007 capping a strong week for Wall Street, as investors drew confidence from strong results at Oracle Corp. and a continued sense that lower interest rates should help bolster the economy. The Dow Jones industrial average rose 53.49, or 0.39%, to 13,820.19. Broader stock indicators also rose. The Standard & Poor's 500 index advanced 7.00, or 0.46%, to 1,525.75, while the Nasdaq Composite index rose 16.93, or 0.64%, to 2,671.22.
Crude oil prices dipped on Monday, 24 September 2007 as oil and gas producers in the Gulf of Mexico restored more output after a mild storm triggered evacuation and production cuts. US crude for November delivery fell 22 cents to $81.40 a barrel.
As per provisional data, foreign institutional investors (FIIs) purchased shares worth a net Rs 762.13 crore, while domestic institutional investors (DIIs) were net sellers of shares worth Rs 277.68 crore on Friday, 21 September 2007
The 30-shares BSE Sensex surged 216.28 points or 1.32% at 16,564.23, an all time closing high on Friday, 21 September 2007. It also hit an all time high of 16,616.84 in late trade. From a recent low of 13,989.11 on 21 August 2007, the Sensex has surged 2557.12 points or 18.27% to 16,564.23, in just 23 trading days.
The market posted weekly gains for fifth straight week, with the BSE Sensex surging 960.43 points or 6.16% to 16,564.23 for the week ended Friday, 21 September 2007. This is the biggest weekly gain ever posted by Sensex. The S&P CNX Nifty rose 319.55 points or 7% at 4,837.55 during the week.
As per the data released on Friday, 21 September 2007, inflation based on the wholesale-price-index rose 3.32% for the week ended 8 September 2007 as against 3.52% in the previous week.
Morning Call
Market Grape Wine :
In House :
Nifty at a supp of 4825 and resis of 4861,4881 and 4944
Intra day: Buy Dena bank above 68.60with a TGT of 72 and a SL of 67
Buy ACC above 1133 with a TGT of 1155 and a SL of 1125
Out House :
Markets at a support of 16453 & 16363 levels with resistance at 16786 & 16868 levels .
Buy : RIL
Buy : REL & Relcap
Buy : IFCI & IDBI
Buy : SBIN
Buy : Naukari , IBulls & IBullreal
Buy : Titan
Buy : ABAN
Buy : Tulip & Educomp
Buy : PunjLLoyd
Dark Horse : RIL , Centextile , Aban , PunjLloyd , RelCap , SBIN & Titan
Bullet for the Day : Tulip & IDBI with stop loss .
Market may move in tune with global markets
Firm US and European indices coupled with positive Asian markets in morning trades may weigh on the local indices in early trades and thereafter could exhibit volatility during intra-day trades. Bullish trend in the market is likely to continue after a steep rise on Friday. However, the prevailing high intra-day volatility may keep the sentiment cautious. Among the domestic indices, the Nifty could test 4850 and breaching this resistance it may test 4900 while it has a support at 4625. The Sensex has a likely support at 15700 and may face resistance at 16650.
US indices rallied on Friday, capping off a strong week driven by the first interest rate cut from the Federal Reserve in more than four years. While the Dow Jones gained by 53 points to close at 13280, the Nasdaq ended 17 points up at 2671.
Crude oil prices dropped marginally on Friday. The Nymex light crude oil for November delivery slipped by 16 cents to close at $81.62. In the commodity space, the Comex gold for December series declined by a dollar to settle at $738.90 a troy ounce.
It is a bullish September for US Market
After making a slow start for the week, US Market picked up good momentum during the course of the week ended Friday, 21 September, 2007 and made some solid gains for the week. The fed fund rate cut by Federal Reserve, few good earnings reports and positive economic news took the indices close to their all-time highs. But a weak dollar dented in some of the gains.
The Dow Jones Industrial Average gained 377 points for the week. Tech - heavy Nasdaq gained 69 points and S&P 500 gained 41 points.
The week started off with cautious trading on Monday, 17 September, 2007 as financial stocks were heavily hit after 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. Dow lost 39 points on that day.
On Capitol Hill, central bank chief Ben Bernanke and Treasury Secretary Henry Paulson testified before a House panel on the mortgage markets situation. Bernanke warned that more delinquencies and foreclosures can be expected in the subprime, adjustable-rate mortgage market.
But the main story of the week was Federal Reserve’s Open Market Committee (FOMC) meeting on Tuesday, 18 September, 2007. Market applauded Federal Reserve’s unanimous decision of lowering fed fund interest rate (what banks charge each other for overnight loans and is the basis for everything from business loans to credit card charges) by 50 basis points from 5.25% to 4.75%. Though market was expecting a 25-50 bps cut in interest rate, traders knew that the chances of a 50 bps cut was really dim.
This was the first rate cut since June 2003. Bernanke and group clearly reiterated today that turmoil in financial markets was a threat to economic growth. The Fed also cut its discount rate (the rate it charges member banks and institutions for short-term loans) from 5.25% to 4.75%.
Market showed its reaction to this decision by soaring by huge points on that day and the following day, Wednesday, 19 September, 2007. On those two days, the Dow Jones Industrial Average gained 412 points. Nasdaq and S&P 500 added 84 points and 52 points respectively in their kitty.
On Thursday, 20 September, 2007, a disappointing guidance from Fed-Ex put a brake in the rally and took away some of the market’s ongoing momentum. Dow slipped by 50 points on that day.
But on Friday, 21 September, 2007, good earnings reports from Nike and Oracle helped market claim back all of Thursday’s losses. The tech sector provided influential leadership throughout the day with Oracle's reassuring report. Nike's earnings news offered support for the consumer discretionary sector.
Other than the above, better- than- expected earnings news from the likes of Lehman Brothers, Goldman Sachs, Morgan Stanley, Best Buy and Kroger helped overall market sentiment. Bear Strens and Circuit City were two names that missed on this front.
Among other economic data that were released during the week, Labour Department reported that consumer prices unexpectedly fell in August by 0.1%. It was the first decline in the Consumer Price Index (CPI) since October of last year. The CPI had risen 0.1% in July.
The core CPI, which takes out volatile food and energy prices, rose 0.2% from July, and was up 2.1% year over year, the lowest level in more than 2½ years.
The Commerce Department reported that U.S. housing starts and permits fell to a 12-year low in August, dropping 2.6% to an annualized rate of 1.331 million, slightly under the 1.35 million forecast by the market.
Executive Summary
For the week, the indices closed considerably up. DJIx was up by 2.7% and S&P 500 was up by 2.8%. Nasdaq was up by 2.7%. Federal Reserve cut interest rate by 50 bps to 4.75% and this enthralled traders. Better-than-expected earnings reports from brokerage firms made the situation further better.
History says that September is generally the worst month of the year, but till now, it seems that all’s well this year for US market in this month. For the year, Dow is up by 10.9%, Nasdaq is up by 10.6% and S&P 500 is up by 7.6%.
In the coming week beginning on Monday, 24 September, the economic calendar, remains heavy for the market. Consumer Confidence, Existing Home Sales, Durable Orders, the final Q2 GDP report, New Home Sales, and Personal Income and Spending data are expected to set the tone for trading.
Grey Market -Kouton, Dhanus, Consolidated, Saamya
Power Grid Corporation 44 to 52 21.50 to 22
Dhanus Tech. 280 to 295 95 to 98
Koutons Retail 370 to 415 75 to 80
Consolidated Construction 460 to 510 205 to 208
Supreme Infra 95 to 108 65 to 67
Saamya Biotech 10 3.50 to 4
Circuit Systems (India) Ltd. 35 3.5 to 4
Kaveri Seeds 150 to 170 15 to 17
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