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Tuesday, September 25, 2007
Post Market Commentary
The market after struggling in the middle at last closed the session in a positive territory. The BSE Sensex grew by 53.71 points to close at 16,899.54 and Nifty increased by 14.7 points to close at 4,946.The BSE mid cap and Small cap closed with little gains as it was up by 3.19 points and 4.08 points at 7,313.33 and 8,967.51 respectively.
BSE Metal index surged by 50.36 points to close at 13,080.83 as JSW steel 4.38%, Jindal Saw 3.01%, Hindalco 2.86%, Hind zinc 2.35% Nalco 0.34% and Sterlite 0.74% closed in green.
BSE bankex index slipped by 16.51 points to close at 8,944.98 as Oriental bank 3.97%, Allahabad bank 3.59%, Andhra bank 2.44%, PNB 2.12%, BOB 1.69%, SBI 1.60% and ICICI bank 0.58% closed lower.
BSE oil & gas index advanced by 126.34 points to close at 9,777.51 as Essar oil 9.33%, IOCL 7.89%, BPCL 7.31%, HPCL 3.41% and Reliance industries 1.82% closed in red.
BSE Capital goods index closed lower by 74.10 points at 14,763.61 as Areva 5.21%, Punj Lloyd 2.20%, Siemens 1.78%, L&T 1.12%, BHEL 0.41%, Suzlon 0.19%, closed in negative.
BSE IT index closed little lower by 1.21 points at 4,348.62 as Patni computer 2.88%, Patni computer 2.82%, Wipro 1.58%, Mphasis 0.56% and TCS 0.38% closed in red.
BSE Health Care Index closed up by 24.37 points at 3,687.60 as Glenmark 2.68%, Pfizer 1.96%, Wockhardt 1.75%, Ranbaxy 1.73% and Cipla 1.17% closed in positive.
BSE FMCG index closed higher by 2.78 points at 2,156.35 as Nestle 1.88%, HUL 1.57%, Bata 0.52% and Britannia 0.16% closed higher.
Market Close: 17k ..So near yet so far..
Cautious trade coupled with weak global cues witnessed a volatile trade before a positive close. RIL supported the intial rally but succumed to profit booking soon as indices traded in a narrow range. Mid Session witnessed a bit of selling pressure as Heavyweights like SBI, MNM and Baja Auto slipped dragging Indices over 100 points. Buying in HDFC Bank, Bharti, HUL during the final hours of trade bailed out Indices to close in green. Banking stocks ended in red after the cut in the interest rates was announced by a few big private players. Continued Rupee appreciation made drove away buyers from the IT counter. BPCL continued to attract buyers even after the management declined any gas or oil discoveries in Assam. Reality, FMCG and Auto counters failed to attract buyers. Small and mid caps also witnessed shyness. European indices continued to trading in red teritory.
Sensex closed higher by 54 points at 16899.539. It was helped up by gains in HDFC Bk (1397.7,+4 percent), Hindalco (167.5,+3 percent), Bharti Tele (964.8,+2 percent), RIL (2403,+2 percent) and Ranbaxy (424.05,+2 percent). Restricting the gains were Hero Honda (743.25,-3 percent), Bajaj Auto (2518.5,-2 percent), SBI (1803,-2 percent), Wipro (435.55,-2 percent) and L & T (2865,-1 percent).
A consortium of state-owned Bharat Petroleum Corporation (BPCL) and Premier Oil of the UK reported that they struck what is believed to be India's largest onshore gas discovery in Assam. BPCL sources mentioned that the initial estimates have been pegged at 8-18 trillion cubic feet (TCF) of in-place gas reserves. The find is in the Cachar area, about 320 km from capital Guwahati. But, later in the day BPCl Management denied any gas finding's in Assam. Intial the stock rallied over 18% with the gas find news but later news falshed in the market the stock slipped to end 7% up.
Greenply is a well established player in interior infrastructure industry. The Company manufactures Plywood, Laminates, Veneer and Particle board. Plywood contributed 51% of the revenue while laminates 49%. Industry growth in plywood and laminates is 10-12% however company has exceeded the industry growth. This industry is dominated by unorganised sector but dynamics seems to be changing now. Do read our note to know how Greenply can counter the unorganized sectors. The stock rallied ahead of its results is what we assume as it close 6% up.
Technically speaking: Volatile session for the day as indices made intra day high of 16,928 and low of 16,677. Volumes for the day stood at Rs.7,500 cr. Uptrend could be maintained and 17,000 levels could be breached if the support levels of 16,690 are maintained till the F&O expiry.
Sensex ends flat
In a spiritless trading session, the market displayed a range-bound trend with a select bout of buying and selling activities. After opening 45 points higher over its previous close of 18,646, the Sensex scaled higher to touch an intra-day high of 18,928. In mid session the market remained steady, however the sentiment turned bearish at the end of the session, and the index dipped to the day's low of 16,676. However, the Sensex on the back of selective pivotals in stocks ended on a flat note at 16,900, up by 54 points. The Nifty, however, advanced by six points to close at 4,938. Market breadth on the BSE was negative. Of the 2,816 stocks traded, 1,651 stocks declined, 1,112 stocks advanced and the remaining stocks ended unchanged.
Sectoral indices showed a mixed result. The BSE CD, the BSE FMCG index, the BSE HC index, the BSE Metal index, the BSE Oil & Gas index, the BSE PSU index and the BSE Teck index ended in the green, However, the BSE Bankex index, the BSE Auto index, the BSE CG index, the BSE IT index and the BSE Reality index exhibited weakness.
Among the gainers, HDFC Bank flared up 3.82% at Rs1,398, Hindalco moved up 2.86% at Rs168, Bharti Airtel jumped 2.11% at Rs965, Reliance gained 1.82% at Rs2,400, Ranbaxy scaled up by 1.73% at Rs424, Hindustan Utility was up 1.57% at Rs227 and Cipla advanced up 1.17% at Rs169. Maruti, ACC, Satyam Computer, HDFC, Infosys, ONGC and Grasim reported steady gains. However, M&M dropped 2.64% at Rs763, Bajaj Auto shed 2.16% at Rs2,518 and SBI dipped 1.60% at Rs1,803. Wipro, L&T, and Ambuja Cement were marginally down.
Over 4.72 crore RNRL shares changed hands on the BSE followed by IFCI (4.41 crore shares), Ispat (4.33 crore shares) and JP Hydro (3.69 crore shares).
Sensex, Nifty strike record closing highs
The market ended in the green today, 25 September 2007. However, market breadth was weak. The market recovered from lower level in late afternoon trade. Earlier, the market had slipped into the red in afternoon trade in contrast to a firm trend in mid-morning trade. European markets, which opened after Indian markets, were weak. Reliance Industries (RIL) hit an all-time high in late trade.
Sensex gained 53.71 points or 0.32% at 16899.54, a record closing high. Sensex came off from a low of 16,676.98, which it had struck in mid-afternoon trade. At day's low of 16,676.98, Sensex had lost 168.85 points for the day.
The S&P CNX Nifty up 6.65 points or 0.13% to 4,938.85, a record closing high. It hit an all-time high of 4,953.90 earlier during the day.
BSE clocked a turnover of Rs 7468 crore compared to Rs 7,783.09 crore on Monday, 24 September 2007.
The market had moved between positive and negative zone in early trade after a firm opening. The Sensex struck all-time high of 16,928.02 in late trade.
BSE Oil & Gas index (up 1.31% to 9,777.51), BSE Metal index (up 0.39% to 13,080.83) and BSE Healthcare index (up 0.67% to 3,687.60) outperformed the Sensex .
However, BSE Realty (down 3.03% to 9,085.47), BSE Auto index (down 0.89% to 5,250.27), Bankex (down 0.18% to 8,944.98), BSE Capital Goods index (down 0.5% to 14,763.61), BSE IT index (down 0.03% to 4,348.62) underperformed the Sensex today.
BSE Mid Cap rose marginally by 3.19 points or 0.04% to 7,313.33 whereas BSE Small Cap rose 4.08 points or 0.05% to 8,967.51. Both these indices underperformed the Sensex.
The market breadth was weak. 1,648 shares declined on BSE as compared to 1,079 that rose. 326 were unchanged.
Out of Sensex pack, 16 stocks declined and rest advanced.
L&T (down 1.12 % to Rs 2864.55), M&M (down 2.64% to Rs 763.05), SBI (down 1.6% to Rs 1803.85), Bajaj Auto (down 2.16% to Rs 2,518.50) were the major losers from Sensex pack.
Bharti Airtel (up 2.11% to Rs 964.80),Hindalco industries (up 2.86% to Rs 167.50) , HDFC Bank (up 3.82% to Rs 1397.70), Reliance Industries ( up1,82% to Rs 2399.60), Ranbaxy Labs (up 1.73% to Rs 424.10) were the top gainers from Sensex pack.
Banking majors declined. SBI (down 1.6% to Rs 1803.85), ICICI Bank (down 0.58% to Rs 990.05) edged lower.
Frontline IT stocks recovered from initial fall. Infosys gained 0.45% to Rs 1771.20 and Satyam Computer rose 0.2% to Rs 410.15. TCS was down 0.38% at 1002.15, off day's low of Rs 991. IT firms derive a lion’s share of revenue from exports and a rise in rupee against the dollar hits their revenue. Rupee has risen sharply in this calendar year.
Index heavyweight Reliance Industries (RIL), rose 1.82% to Rs 2399.60. It hit an all time high of Rs 2426 in the late trade. The stock had witnessed a solid surge over the past few days.
Ranbaxy, India’s biggest drug maker in terms of sales rose 1.73% to Rs 424.10. Ranbaxy said on Monday 24 September 2007, it had signed a licencing agreement with Australia's Sirtex Medical to market the Australian firm's liver cancer product SIR-Spheres. The product, approved by the US Food and Drug Administration, is used to treat patients with inoperable tumours from primary colorectal cancer that have spread to the liver.
India’s biggest oil exploration firm by revenue ONGC declined 0.3% to Rs 930.55. ONGC said after trading hours on Monday, 24 September 2007, it will invest at least $150 million over the next seven years to explore three new deepwater blocks in Myanmar. Myanmar's government has awarded 100% participating interest in blocks AD-2, AD-3 and AD-9 to ONGC Videsh, the overseas investment arm of ONGC.
BPCL rose 7.31% to Rs 348.50 on reports a consortium of BPCL and UK's Premier Oil had found reserves estimated at 8-18 trillion cubic feet in the remote Cachar region in northeastern India. The company had denied the reports.
Gayatri Projects rose 1.34% to Rs 310.65 after it secured new order valued Rs 154.01 crore. The work has to be executed with in a period of 2 years.
Jai Corp rose 5% to Rs 11,424.55 after it said that it has approved the proposal for acquiring two manufacturing units Pet Fibres and Prime Wovens.
South Indian Bank declined 1.28% to Rs 158.60, after it announced its board had allotted 2 crore equity shares to qualified institutional buyers at Rs 163 per share
Sadbhav Engineering was flat at Rs 727.10 after it announced today, 25 September 2007, that it has received a coalfield drilling and excavation order worth Rs 245.24 crore.
Vikash Metal & Power rose 4.08% to Rs 20.40 on BSE, after it announced today, 25 September 2007, that it has received approval from a United Nations body for a carbon-credit project.
Gremach Infrastructure Equipments & Projects hit 5% upper circuit to Rs 266.60 the company said it has taken 75% controlling stake in 11 coal mine licenses in Mozambique having an aggregate 13,520 hectares (about 13,52,00,000 square metres) in prime region of Moatize.
IFCI rose 3.4% to Rs 101.75.The company is set to announce the shortlisted bidders for 26% strategic stake today
BAG Films & Media hit 5% upper circuit of Rs 65.15 on reports that Fidelity International has picked up a 10% stake in the company. The company's board is due to meet on Tuesday afternoon to consider a preferential share and warrant issue.
Turnover toppers on BSE in that order were IFCI (Rs 449 crore), Reliance Natural Resources (Rs 442.34 crore), Jaiprakash Hydro-Power (Rs 275.35 crore), and Reliance Petroleum (Rs 266.60 crore)
The revised trading timing on the bourses due to sun outage becomes effective from today. The stock exchanges have extended trading timing by 45 minutes from 25 September 2007 to 9 October 2007 due to loss of satellite connectivity during this period. Trading will stop on NSE at 11:25 IST and re-open at 12:10 IST. The final closing will be at 16:15 IST, instead of 15:30 IST.
European markets, which opened after Indian market, fell on Tuesday, 25 September 2007, as worries about the financial system and earnings weighed on investors. France’s CAC (down 63 points or 1.12% to 5,628),Germany’s DAX (down 54 points or 0.7% to 7,733) and UK’s FTSE 100 (down 75 points or 1.16% to 6,390), edged lower.
Media reports Monday, 24 September 2007, suggested Germany's largest bank Deutsche Bank may take a big hit from subprime mortgage investments.
Asian markets were mixed today. Hong Kong's Hang Seng closed down 100 points or 0.38% to 26,451. Japan’s Nikkei 225 closed 89 points or 0.54% higher at 16,401. Stock markets in South Korea and Taiwan were closed for public holidays.
US stocks fell on Monday as financial shares weakened on news that Germany's largest bank Deutsche Bank may take a big hit from subprime mortgage investments, while a landmark strike at General Motors raised concern about the economic outlook. The Dow Jones industrial average finished the day down 61.13 points, or 0.44%, at 13,759.06. The Standard & Poor's 500 Index ended down 8.02 points, or 0.53%, at 1,517.73. The Nasdaq Composite Index was down 3.27 points, or 0.12%, at 2,667.95.
November crude oil fell 67 cents to settle at $80.95 per barrel on the New York Mercantile Exchange on Monday, 24 September 2007, as energy companies in the Gulf of Mexico began restoring output shut by a storm.
Market News - Vikash Metal and Power
Vikash Metal & Power Ltd has informed that Waste Heat Recovery based Captive Power Plant of the Company, has been registered under CMD Project with UNFCCC. The Captive Power Plant is based on Waste Heat Recovery module whereby flue gas released by the Sponge Iron kilns is used to generate steam in the boiler thereby replacing fossil fuel for generating power. It will involve reduction of 55,000 Metric Tonnes of CO2 equivalent per annum, which will lead to a substantial revenue inflow by selling C E R credits (Certified emission reduction), which will accrue to the Company for a period of 10 years
India - Australia Itinerary
1. Bangalore, KSCA Stadium (Sep 29 D/N 2.30 pm IST),
2. Kochi, Nehru Stadium (Oct 2, 9 am),
3.Hyderabad, Rajiv Gandhi Stadium-Hyderabad, (Oct 5, 3.30 pm),
4.Chandigarh, Sector-16 Stadium (Oct 8, 3.30 pm),
5. Vadodara, IPCL Sports Complex (Oct 11, 3.30 pm),
6. Nagpur, Vidarbha CA Ground (Oct14, 3.30 pm),
7. Mumbai, Wankhede Stadium (Oct 17, 9 am).
Twenty20 International: Mumbai, Brabourne Stadium (Oct 20)
Morning Call - Sep 25 2007
Market Grape Wine :
In House :
Nifty at a supp of 4901 and resistance at 4967 and 5000 levels .
Above 4944 closing to see markets at 5120 levels expectation .
Buy : Intraday : BRFL
Buy : Intraday : ACC
Buy : Intraday : OCL
Buy : Positional : Indiacement & MadrasCement
Buy : in F&O JpAsso
Sell : in F&O Polaris
Out House :
Markets at a support of 16453 & 16363 levels with resistance at 17017 & 16868 levels .
Buy : RIL
Buy : REL & Relcap
Buy : IFCI & IDBI
Buy : SBIN
Buy : RNRL
Buy : Grasim
Buy : ABAN
Buy : Centextile
Buy : PunjLLoyd
Dark Horse : RIL , Centextile , Aban , PunjLloyd , RelCap , SBIN & IDBI
Bullet for the Day : Centextile & Jphydro with stop loss .
Crude eases for second day
Crude prices drop as storm chances dissipate but natural gas soars
Crude oil prices softened today after the storm threat at Gulf of Mexico dissipated. The Gulf accounts for about 25% of U.S. oil production. With this, crude slipped for the second consecutive day.
For the day ending Monday, 24 September, 2007, crude-oil futures for light sweet crude for November delivery closed at $80.95/barrel (lower by $0.67/barrel or 0.82%) on the New York Mercantile Exchange. Futures touched $83.90, on 20 Sept, the highest intraday price till date. Prices are up 33% from a year earlier.
BP, Royal Dutch Shell Plc and other oil companies sent workers back to the Gulf after a tropical depression made landfall without becoming a storm.
Brent crude oil for November settlement fell 39 cents (0.5%) to close at $78.91 a barrel on the London-based ICE Futures Europe exchange.
Natural gas rallies on storm prediction
Natural gas rose in New York on speculation three possible tropical weather systems may become storms, possibly threatening Gulf of Mexico production. Gas for October delivery rose 28.7 cents (4.7%) to settle at $6.367 per million British thermal units.
Against this backdrop, October reformulated gasoline closed at $2.0834 a gallon, down 3.11 cents. October heating oil closed down 2.56 cents at $2.2306 a gallon.
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.
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.
Sideways movement may continue
The market is likely to witness sideways movement on the back of a strong intra-day volatile moves. Stocks across sectors along with heavyweights may gyrate sharply. Overnight weakness in the US indices and mixed Asian markets in mornings trades may further dampen the investors' sentiment. On the technical side, the Nifty has a stiff resistance at 4965 and the downside cap at 4880, while the Sensex could test higher levels of 17300 and has a likely support at 16300.
US indices registered steady losses on Monday as Dow Jones dropped 61 points to close at 13759, the Nasdaq fell three points at 2668. Most of the Indian ADRs were gainers on the US bourses. Rediff rallied sharply and soared over 7.32% followed by VSNL gained 3.29% while Wipro, ICICI Bank, HDFC Bank, MTNL ,Tata Motors andDr Reddy ended with steady gains. Satyam fell sharply and tumbled over 4.61% and Infosys declined by 1.39%, while Patni Compuetrs and Wipro ended with marginal loss.
Crude oil prices dropped marginally on Monday. The Nymex light crude oil for November delivery slipped by 67 cents to close at $80.95. In the commodity space, the Comex gold for December series advance by a 40 cents to settle at $739.30 a troy ounce.
Trading Calls
Nifty (4932) Sup 4894 Res 4970
Buy Bank India (264) SL 260 Target 272, 275
Buy DLF (781) SL 776
Target 791, 795
Buy ACC (1140) SL 1130
Target 1170, 1175
Sell Dr Reddy’s (637) SL 643 Target 627, 623
Sell Patni (454) SL 459
Target 446, 443
Profit booking around 17K
"If the facts don't fit the theory, change the facts.”
It’s been a dream run for Dhoni and his talented bunch of cricketers in the T20 World Cup. The same holds true for the bulls on the bourses of late. Just like not many expected the 'Men In Blue' to win the first T20 Word Championship, fewer were willing to bet on the Sensex being close to 17k so fast after last month's global carnage.
The rules of the game changed, and the bulls and men in blue were fast to adapt to the situation. Thanks partly to the timely action of central banks across the world, and also because of the strong visibility in India's economic growth, FIIs are back with a bang. In the past three days since the impending Fed announcement, the foreign funds have poured in $1.23bn into Indian stocks. And, we are just talking about the cash market here. The interest rate differential between the US and India has clearly revived interest of global investors in high-yielding assets like Indian shares. This may continue if the Fed decides to cut rates again.
In the immediate future, we expect the current momentum to lift the Sensex past 17k and the Nifty past the 5k mark. However, the slight weakness in markets in the US and Asia could play spoilsport. Also, there could be some profit booking after the nearly non-stop surge since late August. The F&O expiry and news of possible SEBI inquiry in the trading of certain scrips in the past few days could also stop the bulls the bulls in their tracks, albeit temporarily. From today till Oct. 9, we will have a change in market timings due to the sun outage. History suggests that the market tends to be lackluster during this period. It remains to be seen if this trend persists or the bulls will also make new history, a la Dhoni & Co.
We would advise investors to remain positive though the market may see some softness after the recent spurt. A lot of stocks have rallied ahead of fundamentals purely on momentum and possible 'stage-management' by vested interests. One should lock in gains in these scrips and re-enter at lower levels. Quite a few scrips have also underperformed despite the sharp pullback from last month's lows. Investors holding these laggards may also exit these counters at every rally. Being stock specific at all times is the right strategy to avoid a hit on returns.
US shares slipped on Monday owing to profit booking following last week's Federal Reserve inspired rally. Investors were also cautious ahead of a string of key economic reports due later in the week.
Citigroup, Bank of America and JPMorgan Chase declined after the IMF said credit markets may not normalize soon. Exxon Mobil led energy companies to the first drop in 10 days after crude prices decreased. An index of homebuilders in the S&P dropped to the lowest since May 2003 before data this week on home sales and earnings reports from a couple of industry players.
The S&P 500 fell 8 points, or 0.5%, to 1517.73. The Dow Jones Industrial Average lost 61 points, or 0.4%, to 13,759.06. The Nasdaq Composite Index slipped 3 points, or 0.1%, to 2,667.95.
After the close, home improvement retailer Lowe's warned that fiscal 2007 earnings will come in at the low end or slightly below its prior guidance of $1.97 to $2.01 per share. Lowe's shares fell 4% in extended-hours trading and dragged down rival Home Depot by 2%.
Tuesday brings the September consumer confidence and August existing home sales reports shortly after the start of trade. Reports are also due on consumer confidence, housing, durable goods orders and personal income and spending.
GM was active after the auto major's US factory employees staged their first nationwide strike in 37 years after the company failed to reach a new labor agreement with the United Auto Workers. However, union leaders said they were willing to resume talks. GM stock had risen as much as 3% in the morning but gave up those gains by the afternoon.
Treasury prices ended the session little changed, with the yield on the 10-year note at 4.62% from late on Friday. COMEX gold for December delivery rose 40 cents to settle at $739.30 an ounce. In currency trading, the dollar fell to a new record low against the euro and also slipped against the yen.
US light crude oil for November delivery lost 67 cents to $80.95 a barrel on the New York Mercantile Exchange. Last week, the October contract settled at a record high of $83.32.
European shares traded mixed as strength in mining stocks offset the lingering worries about the effect of the credit market turmoil on financial institutions such as Deutsche Bank and Northern Rock.
The pan-European Dow Jones Stoxx 600 index rose 0.1% to 376.97. The UK's commodities-heavy FTSE 100 closed up 0.1% at 6,465.90, while the French CAC-40 slipped 0.1% to 5,692.49 and the German DAX 30 inched down 0.1% to 7,787.92.
In the emerging markets the scene was mixed. The Bovespa in Brazil was up 1.6% at 58,719 while the IPC index in Mexico shed 0.1% to 30,543. The RTS index in Russia gained 0.8% at 2042 and the ISE National-30 in Turkey dropped 0.7% at 67,966.
Asian markets are down marginally this morning. The Nikkei in Tokyo was down 23 points at 16,289 while the Hang Seng in Hong Kong rose 30 points to 26,582. The Hang Seng was down 0.7% in early minutes of trading. The Straits Times in Singapore advanced 7 points to 3645.
Markets hit new peak for a second day in a row with the Reliance pack leading the rally yet again. Firm global cues coupled with strong buying momentum in the scrip’s across the sectors lifted the markets to hit their respective all time highs. Even the turnover was at its all time high registering a whooping 1.06 lakhs crore. Finally, BSE 30-share benchmark Sensex ended 281 points higher to close at 16845. NSE Nifty surged 93 points to close at 4931.
Reliance stocks continued their dream run. RNRL surged by over 22% to Rs93, RPL gained 8% to Rs167, Reliance Industries advanced by 3.5% to Rs2363, RIIL was frozen at 10% to Rs1149.05, REL advanced by 8% to Rs1091 and Reliance Capital added 2% to Rs1572.
JSW Steel gained by 2% to Rs740 after reports stated that the company has planned increasing US pipe output by 75% to 0.35mn ton next year and may increase to 0.5mn ton by March 2009. The scrip touched an intra-day high of Rs40 and a low of Rs724 and recorded volumes of over 2,00,000 shares on NSE.
Himachal Futuristic was locked at 20% upper circuit to Rs24.45 following reports that the company has launched subscriber tariff based on per second basis. The scrip touched an intra-day high of Rs24.45 and a low of Rs20 and recorded volumes of over 4,00,00,000 shares on NSE.
Usha Martin advanced 2.3% to Rs53 on reports that the 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. The scrip touched an intra-day high of Rs54 and a low of Rs52 and recorded volumes of over 1,00,000 shares on NSE.
IFCI rose by over 20% to Rs98 before bidders for the company is announced. The scrip touched an intra-day high of Rs99 and a low of Rs83 and recorded volumes of over 14,00,00,000 shares on NSE.
DLF surged by over 4.5% to Rs781 following reports that the company has emerged as the highest bidder at Rs66bn for setting up Tidel-II, the second IT and ITES SEZ in Chennai. The scrip has touched an intra-day high of Rs785 and a low of Rs747 and recorded volumes of over 3,00,00,000 shares on NSE.
Auto stocks raced ahead. TVS Motors surged by over 2.3% to Rs72, Hero Honda advanced by 4% to Rs769, Tata Motors gained by 1% to Rs744 and M&M added 1.2% to Rs783.
Capital Good stocks also were on the move led by gains in index heavyweight BHEL, the scrip surged by over 2% to Rs2009, L&T advanced over 4% to Rs2900, Punj Lloyd was up by 0.2% to Rs313.
Banking stocks ended higher on back of gains in the index heavyweights, ICICI Bank surged by over 3% to Rs998, SBI advanced by 1.6% to Rs1830 and HDFC Bank gained 2.7% to Rs1354. Andhra Bank, PNB and Bank of Baroda were the major gainers among the Mid-Cap stocks.
After a bounce back in previous trading session IT stocks yet again lost ground as India's rupee rose to a nine-year high, the rupee rose 0.2% to 39.82 per dollar the highest since May 1998. Infosys slipped by over 3.5% to Rs1761, TCS was down by 1.2% to Rs1005, Satyam Computer dropped by 2.7% to Rs407 and Patni lost 2.2% to Rs453.
Consumer Durable stocks also had a quite session. Titan Industries was down 0.6% to Rs1462, Videocon Industries slipped 0.5% to Rs366.
Stocks in News:
IOC plans to invest Rs450bn over the next 5 years to enhance its refining capacity to 80 mn tones per annum.
UBS Global Real Estate plans to launch a $1bn fund for India. The company has tied up with K Raheja Group to finance various projects.
ONGC will invest $150mn over next seven years in Burma for exploration. The company has been awarded 100% participating interest by the Myanmar Government.
Essar Shipping & Logistics Ltd. has placed an order for 6 supramax bulk carriers at an investment of $210mn with ABG Shipyard Ltd.
RNRL is planning a up to 20% stake sale in its coal based methane business.
Reliance Retail in talks with US based GAP for a franchisee agreement.
Syndicate Bank plans a FPO of 80mn shares by end of the fiscal year.
Tata Power to pick up 15% stake in power exchange to be set up by NCDEX and NTPC.
ICICI Bank and HDFC have cut rates on loans for cars and homes, respectively.
GAIL has announced its plan to explore options for strategic co-operation with BPCL for petrochem and E&P activities.
HCC, in joint venture with Alpine Mayreder and Samsung Corp has bagged a prestigious contract worth Rs7.7bn from DMRC.
Fund Activity:
FIIs were net buyers of Rs11.9bn (provisional) in the cash segment on Monday and the local institutions pulled out Rs6.7bn. In the F&O segment, foreign funds were net buyers of Rs5.08bn.
On Friday, FIIs were net buyers to the tune of Rs9.24bn in the cash segment. Mutual Funds were net buyers of Rs1.29bn on the same day.
Major Bulk Deals:
Deutsche MF has sold Madhucon Projects; Lehman Bros has bought Mastek while HSBC Global has sold it; ABN AMRO Bank has sold PSL; Emerging Market has picked up Ruchi Soya while Goldman Sachs has sold the stock; Motilal Oswal has purchased Selan Exploration; Reliance Capital has bought SKF India while HSBC Financial has sold it; Reliance MF has picked up Subhash Projects while Deutsche Securities has sold it; Goldman Sachs has sold Visa Steel Lotus Global has purchased Vyapar Industries.
Upper Circuit:
Bag Films, Gremac Infrastructure, RIIL, Goldstone Tech, GMR Industries, Himachal Futuristic, Accel Frontline, Action Finance, Silverline Technologies, Ruby Mills, Jai Corp, Prakash Industries, IID Forgings.
Lower Circuit:
SSI, Bombay Burmah, Dhanalakshmi Bank.
Daily Technical Analysis
Nifty — The index opened on a positive note and witnessed a rally throughout the day’s trading session. It ended the day with gains of 94 points.
5 Minute Chart — The index is trading in an upward sloping channel from the low of 4847 on the 5 minute chart. Price projection on the upper end of the channel is around 4948-4960. On the downside key intra-day support is around 4912; break of 4912 could see Nifty drift down intra-day toward 4880 levels.
Conclusion — Intra-day support is around 4912; on the upside index can test
4948-4960.
Nifty September 2007 futures hit all time high just below 4,950
Reliance pack dominate turnover charts
The Nifty September 2007 futures settled at 4938, a premium of 5.80 points as compared to spot closing of 4,932.20. Nifty September 2007 futures hit an all time high of 4947 in intra-day trade
The NSE’s F&O turnover amounted to Rs 79397.68 crore as compared to Rs 75928.77 crore on Friday, 21 September 2007.
Reliance group stocks dominated turnover charts. RNRL September 2007 futures settled at slight premium, at 94.45, compared to the spot closing of Rs 93.85. It was the most active contract with turnover of Rs 3148.79 crore.
Reliance Capital September 2007 futures settled at premium, at 1576, compared to the spot closing of Rs 1573.10.
Reliance Communications September 2007 futures settled at premium, at 600.70, compared to the spot closing of Rs 599.
Reliance Petroleum September 2007 futures settled at premium, at 168.20, compared to the spot closing of Rs 167.40.
Reliance Energy September 2007 futures settled at premium, at 1098.65, compared to the spot closing of Rs 1092.
However Reliance Industries September 2007 futures settled at sharp discount, at 2349.50, compared to the spot closing of Rs 2360.35.
In the cash market, the S&P CNX Nifty rose 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.
Grey Market - Maytas, Supreme Infra, Saamya Biotech
Power Grid Corporation 44 to 52 22 to 23
Dhanus Tech 280 to 295 110 to 115
Koutons Retail 370 to 415 95 to 100
Consolidated Construction 460 to 510 210 to 220
Supreme Infra 95 to 108 75 to 80
Saamya Biotech 10 8 to 9
MAYTAS Infra 320 to 370 140 to 150
Circuit Systems (India) Ltd. 35 4 to 5
Kaveri Seeds 150 to 170 12 to 15
Technical Analysis
Sensex — After posting a low of around 13,780 (17 Aug 2007), the index rallied and closed above its previous all-time high of 15,869 (24 July 2007). The index is on a strong uptrend, exhibiting a sequence of higher highs and higher lows (higher tops and higher bottoms).
Wave Count: Sensex — Taking price extreme at 12,316 (16 March 2007), the index completed Wave (1) at 15,868 (24 July 2007). Wave (2) corrected the advance in Wave (1) toward 13,780 ( 17 August 2007). Wave (1) was from a low of 12,316 to a high of 15,868 (15,868 – 12,316 = 3,552 points). Currently we are into Wave (3) of the advance, which has a minimum price target of 17,332 (assuming Wave (1) = Wave (3) in “Price Movement”, 17,332 is derived as 13,780 +3,552. Assuming Wave (3) = 161.8% of Wave (1), the target levels are around 19,527. Wave (3) targets of (i) 17,332 is derived as 13,780+3,552. (ii) 19,527 is derived as 13,780+5,747, the level of 5,747 is derived as 161.8% of 3,552. The level of 13,780 is the assumed end of corrective Wave (2)
Nifty — Taking price extreme at 3,574 (16 March 2007), the Nifty completed Wave (1) at 4,648 (24 July 2007). Wave (2) corrected the advance in Wave (1) towards 4002 (17 Aug 2007). Wave (1) was from the low of 3,574 to the high of 4,648 (4,648 - 3,574 = 1074 points). Currently we are into Wave (3) of the advance, which has a minimum price target of 5,076 (assuming Wave (1) = Wave (3) in “Price Movement”. Assuming Wave (3) = 161.8% of Wave (1), the target levels are around 5740. Wave (3) targets of (i) 5,076 is derived as 4,002+1,074.
(ii) 5,740 is derived as 4,002+1,738, the level of 1,738 is derived as 161.8% of 1,074. The level of 4,002 is the assumed end of corrective Wave (2)
Moving Averages: Sensex — The index is trading above the 50 dma at 15,246 and 200 dma at 14,207. The Weekly moving averages are 10 wma = 15245, 20 wma = 14,852 , 50 wma = 14,067. The index has support at around the 15,246 level (50 dma and 10 wma). A weekly close below 15,246 could see the index enter a shortterm consolidation.
Valuations ahead of Fundamentals
Stock valuations have raced ahead of fundamentals, but bulls hit the Street again on Monday, driving up the Sensex by another 281.60 points. The benchmark index rose to a record high for the fourth straight session. A section of the market expects the upward momentum to continue, led by robust foreign inflows.
On Monday, the Sensex closed at 16,845.83 points, rising 1.70%; the Nifty ended 94.65 points or 1.96% higher at 4932.20 points. Since the cut in a key interest rate by the US Federal Reserve on September 18, both indices have risen roughly 7-8%.
“Our momentum indicators are still supportive, but our value indicators are increasingly suggesting that momentum is the main source of support. The ultimate sell signal would be a reversal in momentum. That, coupled with where valuations currently stand, would spell trouble,” Citigroup analysts said in the latest note to clients.
Most observers believe that the current momentum is unlikely to break soon, as the Fed rate cut has created more opportunities for carry trades. This involves investors borrowing money in countries with lower rates and investing in shares or high-yielding government paper in emerging markets like India for higher returns. Given that the US Fed is expected to cut rates further, brokers expect more foreign money to flow into India.
According to Almondz Global Securities technical analyst and derivative strategist Gurudatta Dhanokar, “The current move of the market is up and the open interest is increasing that will reinforce the trend. In the near future, when the market will turn, it will be very sharp. One of the best sectors looking at the charts in medium to long term is power. It will outperform the market and downside is limited. Stocks that look attractive are power and telecom. Overall the charts are suggesting good upside in medium to long term. The investors can avoid IT stocks as if the market corrects, crack will be more in IT stocks.”
Since the Fed rate cut, foreign funds have invested over Rs 5,000 crore in India. Prior to the rate cut, foreign institutions had net invested roughly Rs 4,800 crore in Indian shares in September. The strong foreign fund inflows pushed the rupee to a fresh nine year-high of 39.77 against the dollar on Monday.
The stronger rupee continued to weigh down sentiment in software shares, which fell roughly 1-3% on Monday. Since software exporters derive a major chunk of their revenues in dollars, a weaker dollar impacts their revenues and margins.
Stocks of both Mukesh and Anil Ambani group companies extended their dominance on Monday. Fund managers seemed slightly baffled by the kind of surge seen in most Reliance shares in the past 3-4 sessions. “It is true that Reliance shares are considered as one of the proxies for the Sensex.
But I am not sure whether this kind of euphoria in these shares is justified,” said the fund manager with a private mutual fund. Reliance Industries, Reliance Energy and Reliance Communications have gained 13-20% in the past four sessions against a 7% rise in the Sensex.
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