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Wednesday, September 26, 2007
Post Market Commentary
The market after touching the psychological mark managed to close the session with marginal gains as the volatility gripped the market. The benchmark index struck an all time high of 17,073.87 mark as well as the S&P CNX Nifty touched the all time high mark. The IT index remained attractive during the trading session as RBI relaxed the norms for outbound investments by mutual funds as well as raised the limit for the repay of the external loans of the companies. Finally, BSE Sensex closed at 16,921.39 with a gain of 21.85 points. The NSE Nifty advanced by 1.65 points to close at 4,940.50. Overall, the market breadth was positive as 1492 stocks were closed in green whereas 1262 were ended up in red zone while 61 stocks remained unchanged in BSE. 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. The Sensex covers the Journey from 16,000 to 17,000 in just 5 trading sessions, which is the fastest ever surge.
BSE IT index closed firmly at 4,501.97 as it was up by 153.35 points. Patni computers 7.60%, HCL tech 5.81%, Satyam 4.81%, Wipro 4.33%, TCS 3.88% and Infosys 3% closed in green.
BSE bankex index surged by 172.82 points to close at 9,117.80 as Allahabad Bank (3.17%), Andhra Bank (3.53%), ICICI Bank (2.96%), SBI (2.45%) and PNB (1.61%) closed higher.
BSE Metal index grew by 4.81 points to close at 13,085.64 as JSW Steel (4.38%), NALCO (4.71%), Tata Steel (0.97%) and SAIL (0.35%) are closed in green.
BSE oil & gas index slipped by 160.57 points to close at 9,616.94 as Cairn India (6.40%), Reliance industries (3.24%) and RPL (2.57%) closed lower
BSE Capital goods index closed lower by 109.26 points at 14,654.35 as ABB (0.95%), BHEL (0.65%), L&T (0.76%), Suzlon Energy (0.45%) closed in negative.
BSE Health Care Index closed higher by 3.76 points at 3,691.36 as Pfizer 4.65%, Matrix labs 2.33%, Nicholas Piramal 1.64%, Cipla 0.89% and Dr Reddy''s Lab 0.67% closed in positive.
Sistema buys 10% stake in Shyam Telelink
In another round of consolidation, the Russians have arrived to participate in the Indian telcom services sector. Russian telecom major Sistema has acquired 10 per cent stake in Shyam Telelink - the basic telecom services provider in the state of Rajasthan. Shyam Telelink is a group firm of Shyam Telecom.
The deal value could not be immediately ascertained. But the Russian major plans to increase the stake to 51 per cent subject to approval from the Foreign Investment and Promotion Board. The long-term plan is to take the stake up to 74 per cent, as is allowed under the FDI policy.
Shyam Telecom shares on the Bombay Stock Exchange surged nearly 20 per cent on Wednesday to Rs 96.45.
Shyam Telelinks, that provides services under the Rainbow & Citymobile brand names in Rajasthan, has applied for nationwide mobile licenses.
Mukesh bhai richest Indian !
Internet major Google is in early stages of negotiations with Reliance Communications to take a part of the Flag Telecom’s trans-Pacific undersea communications cable on a long-term lease.
Google is believed to be in talks to take on lease 500 GB bandwidth and this, according to industry sources, puts the deal size at around $80-100 million (Rs 320-400 crore).
According to sources close to the development, the companies have initiated talks to set up a joint cable under a “cooperative arrangement”.
Under the broad contours of the discussions, Flag Telecom will sell dark fibre to Google. This will help Google save the cost of duplicating a fibre optic network, which would cost around $350-380 million (Rs 1,400-1,500 crore).
With the availability of dark fibre, Google will only need to invest in lighting up the cable, and it would give the company a self-managed, fully secure network.
While for Reliance Communications, with such a pre-sale deal, it would get a reasonable proportion of the capex that would be used for construction of the cable.
When contacted, a Reliance Communications spokesperson declined to comment.
Sources also said Reliance Communications would also look at selling lit-capacity on its global internet protocol networks to Google. Flag has lit-up capacity on its Falcon cable in Wes Asia and other cables on the Mediterranean and East African coasts.
Flag Telecom had recently announced its plan to set up trans-Pacific cable, under its Rs 6,000 crore next- generation network expansion plan. A cable on the trans-Pacific route would cost around Rs 1,400-1,500 crore. ($350-380 million).
Flag has recently awarded construction of its four submarine cables under the Flag NGN plan to Japanese giant Fujitsu.
The move also gains importance as Google was planning to set up its own sub-sea cable across Pacific, under a project called Unity. However, it could not be ascertained whether Google would go ahead with the project or shelve it by leasing a portion of Flag’s trans-Pacific system.
Google - Reliance Communications tie-up
Internet major Google is in early stages of negotiations with Reliance Communications to take a part of the Flag Telecom’s trans-Pacific undersea communications cable on a long-term lease.
Google is believed to be in talks to take on lease 500 GB bandwidth and this, according to industry sources, puts the deal size at around $80-100 million (Rs 320-400 crore).
According to sources close to the development, the companies have initiated talks to set up a joint cable under a “cooperative arrangement”.
Under the broad contours of the discussions, Flag Telecom will sell dark fibre to Google. This will help Google save the cost of duplicating a fibre optic network, which would cost around $350-380 million (Rs 1,400-1,500 crore).
With the availability of dark fibre, Google will only need to invest in lighting up the cable, and it would give the company a self-managed, fully secure network.
While for Reliance Communications, with such a pre-sale deal, it would get a reasonable proportion of the capex that would be used for construction of the cable.
When contacted, a Reliance Communications spokesperson declined to comment.
Sources also said Reliance Communications would also look at selling lit-capacity on its global internet protocol networks to Google. Flag has lit-up capacity on its Falcon cable in Wes Asia and other cables on the Mediterranean and East African coasts.
Flag Telecom had recently announced its plan to set up trans-Pacific cable, under its Rs 6,000 crore next- generation network expansion plan. A cable on the trans-Pacific route would cost around Rs 1,400-1,500 crore. ($350-380 million).
Flag has recently awarded construction of its four submarine cables under the Flag NGN plan to Japanese giant Fujitsu.
The move also gains importance as Google was planning to set up its own sub-sea cable across Pacific, under a project called Unity. However, it could not be ascertained whether Google would go ahead with the project or shelve it by leasing a portion of Flag’s trans-Pacific system.
Coming Soon - DLF TElecom
DLF, the country's largest realty developer, today applied for nationwide telecom licences, days before the Department of Telecom (DoT) is supposed to stop accepting applications.
Communications minister A Raja had recently said that DoT would not accept any applications after October 1.
DLF is the fourth realty company to have thrown its hat into the ring for telecom licences in recent days. While Parsvnath Developers was the first realty company to apply in August, Unitech said it would apply for a licence last week. This week, Indiabulls and DLF have also said they intend to apply for licences.
Market Close: Sheds after 17k..
An historic session for Indian market as Sensex crossed 17000 levels successfully. It was stunning day where Sensex zoomed to over 17000 mark in opening trade. It took just 6 days to move from 16000 to 17000. However, the indices could not sustain at higher levels ahead of FNO expiry, closed with modest gains. Markets started the day on a fair note but indices displayed a volatile session. After touching all time high indices could not sustain and profit booking engulfed to bring it down. Auto, FMCG, Capital Goods, FMCG, Energy and Realty stocks ended in red. Despite the Rupee appreciation investors preferred to buy IT stocksahead of their results and the Banking stocks were also in favor. More interest was seen in mid and small caps compared to front line stocks and outperformed the day. Reliance Industry the Oil major reported that the company is likely to close Reliance Fresh stores in UP, Noida and Ghaziabad, as result of this stock slipped to end 3.36% down. Asina Indices ended in green but China closed in red while Europe trading in green.
Sensex Ended up by 22 points at 16921.391. It was helped up by gains in Satyam (431.3,+5 percent), Wipro (454.6,+4 percent), TCS (1041,+4 percent), HDFC (2476.8999,+3 percent) and Infosys (1824.3,+3 percent). Restricting the gains are Rel Energy (1026.2,-6 percent), RIL (2321.95,-3 percent), Maruti (962.25,-3 percent), NTPC (191.5,-2 percent) and HDFC Bk (1374.75,-2 percent).
L.G.Balakrishnan & Bros Ltd (LGB) is a leading manufacture of wide range of Auto components. The company has 5 manufacturing plants located at Coimbatore, Dindugal, Karur, Bangalore and Mysore. LGB manufactures Automobile Transmission and Industrial chains and Rubber Belts which are used in two and four wheelers and sold under the popular brand name 'ROLON'. LGB delivered healthy results for Q1. The Revenues grew by 9% to Rs 121 cr from Rs 111 cr on yoy basis. The Bottom line enhanced by 31% to Rs 3.4 cr from Rs 2.6 cr on yoy basis. The Ebidta grew by 14% to Rs 17 cr vs Rs 15 cr on yoy. The Ebidta margins unchanged at 14%. Valuation seems to be attractive at current market price of Rs 27, the stock trades at 10 times trailing earnings. Future seems positive for long term though near term risk exists from the slow down in Auto sector demand. The high interest cost will hit the company's bottom-line. LGB could see pressure on margins on account of intense competition and price of steel, the key raw material. We are positive about this chain and sprocket business. There are over 40 mn motorcycles on the road and the chains and sprocket set needs to get replaced every 30-40 months. This business should keep growing. For those with a long term view point it may make sense to accumulate.
The Essar Group has placed an order for ABG Shipyard for 6 supramax bulk carriers at an investment of $210 million (Rs 840 cr). These bulk carriers are of 54,000 dwt each priced at $35 mn each (Rs 140 cr). Essar informed that it would have cost more $ 25 mn (Rs 100 cr) if it placed to other oversea yards. The vessels will be delivered between December 2009 and March 2011. The current order book for ABG is Rs 6340 cr. The order book to sales is 9 times. At current market price of Rs 649, stock trades at 27 times of trailing earnings. ABG is leader in industry and continues to dominate, but the valuations are too high at this level. The global ship industry is more competitive compared to Indian shipbuilders. The cost is 20% more compared to other countries like China, Korea and Japan. That?s why Govt is providing subsidy of 30% to encourage the ship manufacturers. But the question is whether the Govt will continue the subsidy or not?. We expect it to continue if not extended then the Indian shipbuilders will be impacted heavly.
Technically Speaking: It was a volatile session for the whole day before closing. Sensex touched intraday high of 17074 and low of 16887. Overall breadth was in favor of Advances, where the Advances stood at 1485, while Declines at 1244. The turnover was good at Rs 7786 cr. Sensex faced some profit booking above 17000 levels. The trend is still up and we look for immediate target of 17300. Support is at 16875.
Last minute buying lifts market
The market witnessed a sharp pull-back after short covering by investors triggered a major rally in heavyweight, tech and banking stocks. The firm close in Asian markets also helped the market to recover from its lows. The Sensex shot past 17,000 mark for the first time in early trades today led by software stocks after easier rules to invest abroad rose expectations despite the rupee's appreciation against the dollar. Despite breaching its previous high, the Sensex slipped on substantial selling to touch the day's low of 16,887 in the last hour of the trading. However, resumption of buying towards the close saw the Sensex gain strength before closing with a gain of 22 points at 16,921 on selective buying. The Nifty closed by adding two points at 4,941.
The market breadth was positive. Of 2,815 stocks traded on the Bombay Stock Exchange (BSE), 1,492 stocks advanced, 1,262 stocks declined and 61 stocks ended unchanged. The BSE IT index led the surge in the sectoral indices and rose 6.53% at 4,502. The BSE Bankex index, the BSE Teck index and the BSE PSU index were the other notable gainers while the BSE Oil & Gas Index, the BSE Realty index, the BSE FMCG index, the BSE CG index, the BSE CD index and the BSE Auto index ended weak.
Buying was led by Satyam Computer, which notched up gains of 4.81% at Rs431. Among the other gainers, Wipro advanced by 4.33% at Rs455, TCS added 3.88% at Rs1,041, HDFC moved up 3.45% at Rs2,477, Infosys jumped by 3% at Rs1,824, ICICI Bank gained 2.96% at Rs1,019 and SBI was up 2.45% at Rs1,848. However, Reliance Energy, Reliance Industries, Maruti Udyog, NTPC, HDFC Bank, M&M, Hindalco and ITC were down 1-5% each.
A sharp rally was witnessed in IT stocks today. Patni Computer soared 7.60% at Rs475, HCL Technologies scaled up 5.81% at Rs297, Rolta surged 5.08% at Rs591 and Tech Mahindra moved up 3.81% at Rs1,322.
Over 5.31 crore Tata Teleservices shares changed hands on the BSE followed by Himachal Futuristics (3.41 crore shares), Ispat Industries (2.37crore shares), Reliance Natural Resources (2.29 crore shares) and Manglore Refinery (2.13 crore shares).
Valuewise, Praj Industries registered a turnover of Rs387 crore on the BSE followed by Reliance Industries (Rs274 crore), Tata Teleservices (Rs233 crore), Indiabulls Real Estate (Rs228 crore) and Reliance Natural Resources (Rs213 crore).
Marksans, Media, India Cements
Marksans Pharma
Cluster: Emerging Star
Recommendation: Book Out
Current market price: Rs98
Book out
Key points
- Marksans Pharma's (Marksans) performance in FY2007 has been extremely disappointing. The company's revenues declined by 17% whereas its profits plunged by a massive 56% to Rs9.9 crore. The company has reported poor revenues in all segments of its business. Sales of bulk drugs have decreased by 35.8% year on year (yoy), led by the decline in bulk drug sales in domestic and export markets, whereas the sales of formulations remained flat at Rs136 crore in FY2007.
- Ciprofloxacin and Ranitidine form the mainstay of Marksans' bulk business. With increasing commoditisation and competition from Chinese players, the prices for Ciprofloxacin bulk and Ranitidine bulk have fallen by approximately 28% each in the last one year, leading to a decline in the realisations. Due to this, the company's bulk business has plunged by almost 36% in FY2007 and 42% in Q1FY2008. The uncertainty over the future prices of these bulk drugs is a cause for concern and makes Marksans' bulk business unpredictable.
- Against Rs100 crore worth of orders for the CRAMS business for FY2007, Marksans has only executed Rs52 crore. This was primarily due to a delay in obtaining regulatory approvals for its filings and site variation applications. Marksans has made four certificate of suitability (COS) filings so far for Ciprofloxacin, Ranitidine, Metformin and Losartan. Our growth assumptions for the export business were based on the company receiving these COS approvals and launching these products in FY2007. However, the company has not yet received any of the COS approvals and there seems to be no clarity on the timeline of these approvals. We do not expect a major ramp-up in the company's CRAMS business until the regulatory approvals come through.
- Marksans had raised $50 million in November 2005 through a foreign currency convertible bond (FCCB) issue, primarily to fund acquisitions. Even though the redemption date for the FCCBs is distant--in November 2010--yet the conversion price of each bond into an equity share stands at Rs336.92, which is almost three times the current market price of Rs98 per share. Further, if the bonds are not converted into equity shares by November 2010, Marksans will have to redeem the bonds at 145.2% of their principal amount. We believe the risk of non-conversion and the resultant burden of the redemption premium are causing Marksans to retain the FCCB money as cash instead of deploying it for acquisitions.
- Despite giving repeated promises and timelines, the management has not been able to deliver on several counts, ranging from growth in the domestic market, to execution of the CRAMS orders and approval of regulatory filings. The company seems to be in an investment phase, planning for its future growth in the domestic market and its foray into newer markets such as South Africa, Europe and the USA. At the current price of Rs98.0, the stock is trading at 52x its FY2007 consolidated earnings. In view of the disappointing performance in FY2007 and the uncertain outlook on the future prospects of the company, we advise investors to book out of the stock.
India Cements
Cluster: Ugly Duckling
Recommendation: Buy
Price target: Rs300
Current market price: Rs285
Annual report review
On implementation of the revised capex plan the company will emerge as one of largest cement players in the south with a capacity of 15MMT. Consequently, it will have higher pricing power in the wake of the downturn in the cement cycle. The higher prices in the south coupled with the savings from blending will drive the profitability of the company going ahead. Also, the company's strategy of putting up additional capacities through the brownfield route rather than the greenfield route will save its capital costs and thus enhance its RoCE.
We expect the company's earnings to grow at a compounded annual growth rate of 27% over FY2007-09 on an enhanced equity capital of Rs260 crore. The stock has appreciated by 22% in the last one month. At the current market price of Rs285, the stock is currently trading at 9.9x its FY2009 EPS and an enterprise value/EBITDA of 5.8x. We maintain our price target of Rs300 per share.
SECTOR UPDATE
Media
TRAI's notification on interconnection issues in DTH
To facilitate the smooth expansion of direct to home (DTH) services in India, the Telecommunications Regulatory Authority of India (TRAI) has been addressing the key issues that have emerged in the initial stages of the DTH takeoff in the country. TRAI has recently issued regulations mandating the broadcasters to issue Reference Interconnect Offer (RIO) to DTH service providers.
Marksans, Media, India Cements
TTML
5.31 crore shares were traded in Tata Teleservices (Maharashtra) counter on BSE today. The scrip topped volumes on BSE. The share price rose 7% to Rs 43.55.
National Stock Exchange had barred fresh positions in the company's derivatives contracts as the open interest had crossed the 95% limit.
Tata Teleservices (Maharashtra) reported a net loss of Rs 28.43 crore in Q1 June 2007 as against net loss of Rs 112.59 in Q1 June 2006. Sales rose 21.47% to Rs 393.34 crore in Q1 June 2007 over Q1 June 2006. The results were announced on 30 July 2007.
Himachal Futuristic Communications (HFCL) clocked the second highest volume of 3.41 crore shares on BSE. The share price surged 12.79% to Rs 26.90.
HFCL reported a net loss of Rs 15.63 crore in Q1 June 2007 as against net profit of Rs 17.87 crore in Q1 June 2006. Sales fell 50.5% to Rs 110.77 crore in Q1 June 2007 over Q1 June 2006.
Ispat Industries clocked the third highest volume of 2.37 crore shares on BSE.The share price rose 1.25% to Rs 28.40.
As per recent reports, Ispat Industries is planning to invest about Rs 10,000 crore within five years to ramp up domestic production. It is also planning to expand in overseas through capacity expansion and backward integration.
Reliance Natural Resources (RNRL) clocked the fourth highest volume of 2.29 crore shares on BSE. It declined 3.69% to Rs 91.35.
The stock had showed solid surge recently on reports that the company has applied for a license to undertake city gas distribution business in Delhi, Mumbai, Gurgaon and Noida. In this regard, the company had clarified that an affiliate company, Reliance Fuel Resources has submitted an application to the Ministry of Petroleum and Natural Gas for setting up city gas distribution project in Mumbai, Delhi and National Capital Region
Mangalore Refinery and Petrochemicals (MRPL) clocked the fifth highest volume of 2.13 crore shares on BSE. The share price surged 13.72% to Rs 74.20. Refining shares surged today after reports the government is likely to issue oil bonds worth Rs 12,000 crore to state-run oil companies to partially compensate them for selling fuel at below the cost by mid-October 2007.
Recently, MRPL signed a four-year product supply agreement with Shell India. The agreement, extendable by another two years, covers not only fuel supply but also infrastructure sharing and hospitality and collaboration on health, security, safety and environmental management procedures & practices. The pact will become operational from October 2007.
Sensex retraces from all-time high above 17,000
The market settled with small gains on selective buying in index pivotals. It opened higher as investors bet on another cut in interest rate by the US Federal Reserve next month after US data showed sluggish housing sales and consumer confidence. The market pared gains on profit booking at higher levels in volatile trade.
Asian and European markets were trading firm today while US markets settled mixed overnight. IT, banking and refinery stocks surged whereas realty and oil & gas stocks witnessed selling pressure. Reliance group shares which had surged recently, eased on profit booking.
The 30-shares BSE Sensex was up 21.85 points or 0.13% at 16,921.39, an all time closing high. It opened higher at 16,969.45. It hit low of 16,887.07. It advanced to hit an all-time high of 17,073.87 today. At day's high of 17,073.87, Sensex had gained 174.33 points for the day. At the day’s low of 16,887.07, it lost 34.32 points for the day. Sensex oscillated 186.80 points between day's low of 16,887.07 and high of 17,073.87.
It took just 5 trading sessions for the Sensex to reach 17,000 from 16,000 after the barometer index first struck 16,000 on 19 September 2007. The Sensex’s 1,000-point surge was the fastest ever. The previous record for the shortest 1,000-point journey was 19 days when the Sensex soared from 11,000 to 12,000 in March 2006.
From a recent low of 13,989.11 on 21 August 2007, Sensex has surged 2932.28 points or 20.96% in just 26 trading sessions to current 16,921.39
The S&P CNX Nifty was up 1.65 points or 0.03% at 4,940.50, an all time closing high. It struck an all time high of 4980.85 today. Nifty September 2007 futures settled at 4955, a premium of 14.50 points as compared to spot closing
The market breadth was strong on BSE with 1485 shares advancing as compared to 1244 that declined. 60 remained unchanged
The BSE Mid-Cap index rose 0.54% to 7,352.62. It struck an all time high of 7,428.89 in intra-day trade. The BSE Small-Cap index hit all time high of 9,112.06. It settled up 0.69% to 9,029.34 Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 7,786 crore as compared to Rs 7,491.05 crore on Tuesday, 25 September 2007.
The NSE’s F&O turnover was Rs 78,536.17 crore as compared to Rs 83,677.53 crore on Tuesday, 25 September 2007.
Sectoral indices on BSE displayed mixed trend. BSE PSU index (up 1.01% to 8,055.51), BSE TecK index (up 1.89% to 3,720.46), BSE IT Index (up 3.53% at 4,501.97), outperformed the Sensex.
However BSE Capital Goods Index (down 0.74% at 14,654.35), BSE Consumer Durables index (down 0.37% to 4,745.45), BSE Health Care Index (up 0.10% at 3,691.36), BSE Metal Index (up 0.04% at 13,085.64), BSE Oil and Gas Index (down 1.64% at 9,616.94), BSE Realty index (down 1.23% to 8,973.38), BSE Auto Index (down 0.67% at 5,215.27), and BSE FMCG Index (down 0.88% at 2,137.42) were underperformers.
Among the 30-member Sensex pack, 16 advanced while the rest declined.
Banking and financial shares were in strong demand speculating that Reserve Bank of India may lower interest rates in the next monetary policy review on 31 October 2007.
India’s largest private sector bank in terms of net profit ICICI Bank was up 3.85% to Rs 1028.20. It hit record high of Rs 1032.80 today.
State Bank of India, the country’s largest bank in terms of net profit rose 0.60% to Rs 1850, off its day’s record high of Rs 1876.90 today.
India’s largest private sector mortgage financer in terms of market share Housing Development Corporation (HDFC) surged 3.51% to Rs 2478.50. It hit an all time time high of Rs 2538.
Other banking stocks – Allahabad Bank (up 2.77% to Rs 102), Canara Bank (up 0.95% to Rs 272), Indian Overseas Bank (up 5% to Rs 145), Kotak Mahindra Bank (up 4.40% to Rs 922.10), and Vijaya Bank (up 5.71% to Rs 68.50), surged
The Reserve Bank of India may lower interest rates in the next monetary policy review on 31 October 2007 particularly with India’s inflation down to a five-year low of 3.37% in the first week of September 2007.
Marketmen opine that RBI may take cues from Fed which reduced its key rate for the first time since 2003 by a bigger-than-expected 0.5% to 4.75% on 18 September 2007. The RBI, which has raised borrowing costs nine times since October 2004 to curb inflation, left its overnight lending rate unchanged at 7.75% at its last meeting on 31 July 2007.
IT pivotals advanced after the Reserve Bank of India relaxed the norms for outbound investments by mutual funds and raised the limit for companies to prepay their external loans.
India’s fourth largest software services exporter Satyam Computers was the top gainer from Sensex pack. It soared 5.05% to Rs 432.30 on 7.31 lakh shares.
Other IT pivotals Infosys (up 3.10% to Rs 1826), and TCS (up 4.48% to Rs 1047), also gained
Wipro, the nation’s third largest software services exporter jumped 4.76% to Rs 456.50 on reports that it has bagged a five-year, $130 million contract from British utility Thames Water. As per the agreement, Wipro will provide integrated IT services encompassing applications support, maintenance and infrastructure management services.
The relaxed norms are aimed at checking the appreciating trend in rupee, which has pierced the Rs 40 to a dollar mark to touch a nine-year high against the US greenback.
As per the liberalised norms, companies can now prepay up to $500 million of their external commercial borrowings (ECBs) without RBI approval as against the earlier limit of $400 million, the central bank said in a statement on Tuesday, 25 September 2007.
Tata Steel, the world’s sixth largest steel maker in terms of steel production rose 1.19% to Rs 752.55. Foreign brokerage Credit Suisse has cut the rating on the stock to ‘neutral’ from ‘overweight’.
India’s second largest pharma company in terms of net sales Dr Reddy's Laboratories was up 0.70% to Rs 639.90. As per reports, Swiss drugmaker Roche Holding AG is taking legal action in the United States against Dr. Reddy's Laboratories to stop it selling a generic version of Roche's osteoporosis drug Boniva. Roche's Boniva which is sold as Bonviva in Europe, is covered by patents running from 2012 to 2023.
Reliance Industries (RIL) slipped sharply from day’s high of Rs 2425.90 and settled 3.08% to Rs 2325.75 on 11.63 lakh shares. Reliance Retail, a subsidiary of RIL is likely to hand out termination letters to 1,000-odd employees of Reliance Fresh stores in Uttar Pradesh (UP) in the course of this week as it prepares to formally exit the state. As per reports, it will also close down 20 Reliance Fresh stores in Noida and Ghaziabad.
India’s second largest cellular services provider by market capitalisation Reliance Communications (RCom) slipped 0.90% to Rs 589. As per reports Flag Telecom, the undersea cable arm of RCom has initiated talks with Google for selling part of its capacity on a new cable it is laying between the United States west coast and Far East. The deal seal is speculated to be worth $60-70 million.
Reliance Energy, the country’s second largest power utility company in terms of sales was the top loser from the Sensex pack. It slumped 5.28% to Rs 1030 on 10.96 lakh shares.
Other Reliance Group shares Reliance Natural Resources (down 3.32% to Rs 91.70), IPCL (down 1.91% to Rs 462.90), Reliance Capital (down 2.71% to Rs 1505.30), and Reliance Petroleum (down 2.66% to Rs 155.25), also eased on profit booking after their recent surge
HDFC Bank (down 1.62% to Rs 1375), Maruti Suzuki India (down 2.64% to Rs 965) and NTPC (down 2.23% to Rs 191) were the other losers from Sensex pack.
Praj Industries was the top traded counter on BSE with turnover of Rs 389.86 crore followed by Reliance Industries (Rs 273.29 crore), Tata Teleservices (Maharashtra) (Rs 233.24 crore), Indiabulls Real Estate (Rs 227.94 crore) and Reliance Natural Resources (Rs 212.98 crore), in that order.
Tata Teleservices (Maharashtra) topped volumes on BSE. 5.09 crore shares were traded in the counter. Himachal Futuristic Communications (3.24 crore shares), Ispat Industries (2.22 crore shares) and Reliance Natural Rsources (2.15 crore shares) were the other volume toppers in that order.
Refinery shares surged on reports the government is likely to issue oil bonds worth Rs 12,000 crore to state-run oil companies to partially compensate them for selling fuel at below the cost, by mid-October 2007. Hindustan Petroleum Corporation (up 4.45% to Rs 277), Indian Oil Corporation (up 7.75% to Rs 470), and Bharat Petroleum Corporation (up 5.87% to Rs 368.95) surged.
The government has not allowed refining companies to raise fuel prices in line with cost and instead would compensate them partially through oil bonds. The petroleum and finance ministries are likely to converge on the quantum of loss in about the next 10 days and the government in likely to issue oil bonds by 15 October 2007.
Praj Industries slipped 4.05% to Rs 238.20 on huge volumes of 1.53 crore shares on BSE. Two block deals of 67.28 lakh shares each were executed on the counter on BSE in early trade at average price of Rs 252.50 per share.
Kojam Fininvest rose 2.37% to Rs 266 ahead of the scheme of amalgamation of the company with unlisted Gujarat Glass. Gujarat Glass (GGL) has fixed 6 October 2007 as the record date for the purpose of amalgamating Kojam Finvest (KFL) with itself.
Indiabulls Real Estate gained 7.07% to Rs 613.71 on its plans to raise Rs 2322 crore through issue of convertible warrants to promoters and directors at Rs 540 each. Reportedly, the company plans to invest in power and wholesale businesses. The group would also apply for telecom licences as per one of the reports.
Glenmark Pharmaceuticals declined 1.44% to Rs 394.50 even after it announced today, 26 September 2007, that it has received approval for its semi solids unit from medicines and healthcare products regulatory agency of UK.
GMR Infrastructures (down 4.18% to Rs 826.90) and IFCI (down 3.64% to Rs 98), declined after National Stock Exchange (NSE) barred further F&O positions in 95% of marketwide limit was reached on Tuesday, 26 September 2007.
SRF gained 1.40% to Rs 145.30. As per reports it plans to set up a new polyester industrial yarn spinning unit with an annual capacity of 14,500 tonnes at its existing Gumminipoondi plant in Tamil Nadu. The new project would involve fresh investment of approximately Rs 250 crore. The company has also entered into a technological tie-up with Japan-based TORAY for the new plant.
Elecon Engineering Company advanced 1.52% to Rs 690 after it fixed 11 October 2007 as the record date for the purpose of issue of 2:1 (2 bonus shares for every 1 held) bonus shares.
Accentia Technologies slipped 1.54% at Rs 208.25. It secured an order worth $3.5 million from its UK clients for business process outsourcing services. The order specifications include health care receivables management services, which comprises of complete cycle of documentation/ transcription, coding, billing and insurance claims.
ABB declined 1.20% to Rs 1308 even after it secured a contract worth Rs 93.3 crore for turnkey electrics and automation solution from KHD Humboldt Wedag Gmbh, Germany. The project will be completed by mid 2009.
GAIL (India) surged 3.16% to Rs 375 on reports that the company is considering bonus and or stock split of equity shares before its next annual general meeting. Meanwhile, reports also suggest that company plans to spend Rs 30,000 crore in next 5 years and also plans to set up a petrochemical plant overseas.
B.A.G Films & Media vaulted 5% at Rs 68.40 after its board approved issuing 1.03 crore shares to a unit of Fidelity at an undisclosed price.
European markets, which started after Indian market were trading higher. Key benchmark indices in London (up 0.93% to 6,456.90), Germany (up 0.50% to 7,808.05) and France (up 0.80% to 5,686.72) edged higher.
Asian markets, which opened before Indian market advanced today, 27 September 2007. Japan's Nikkei (up 0.21% to 16,435.70), Taiwan Weighted (up 1.67% at 9,257.47) and Singapore's Straits Times (up 0.70% at 3,650.69) rose.
The Hong Kong stock market was closed today, 26 September 2007
Market may see volatility ahead of the expiry of September 2007 futures & options (F&O) contracts on Thursday, 27 September 2007.
US markets ended mixed yesterday, 25 September 2007 as investors grappled with concerns about consumer spending in some parts of the economy while technology stocks showed broad gains. The Dow Jones industrial average rose 19.59 points, or 0.14%, to 13,778.65. Broader stock indicators were mixed. The Standard & Poor's 500 slipped 0.52 points, or 0.03%, to 1,517.21, while the Nasdaq Composite rose 15.50 points, or 0.58%, to 2,683.45.
Crude oil prices rose on Wednesday, 26 September 2007 after three days of losses, with traders looking toward data expected to show a further decline in U.S. crude stocks. US crude for November delivery edged up 22 cents to $79.75 a barrel while London Brent crude gained 22 cents to $77.84 a barrel.
Maytas Infra IPO Analysis
Promoted by B.Teja Raju (son of chairman of Satyam Computer Services), Maytas Infra (formerly Satyam Construction private limited) is a Hyderabad-based construction and infrastructure development company. Its business is divided into two parts: Construction contractor undertaking projects on a contract basis and infrastructure development involving identifying, sourcing, developing, and operating projects in infrastructure sectors.
In the construction business, the focus is on irrigation, roads and bridges, and buildings infrastructure sectors. Recently, the construction portfolio has been diversified to include civil construction in the power, industrial structures, oil and gas infrastructure, and railway sectors.
Maytas Infra is identifying suitable partners and positioning to exploit the expected opportunities in water and waste-water management, special economic zones, urban infrastructure, ports and airport sectors.
The current IPO is to fund purchase of construction equipment, invest in associate companies and meet other project-related investment commitment.
Strengths
- End June 2007, the order book was Rs 3589.32 crore. This is about 4.6 times consolidated revenue in the year ending March 2007 (FY 2007). The execution period for the order book is 18-36 months. The pending orders are for constructing roads (31%), buildings (13%), railways (5%), high-margin projects comprising irrigation (37%), power (5%) and oil and gas (9%).
- Of the pending orders, about 70%-80% of the contracts provide for price escalation. Thus, margin is to a great extent cushioned against variations in input costs.
- Infrastructure development business has equity interest in 11 projects ranging from 19.5% to 50%. Of these projects, six are road, four power and one port.
Weaknesses
- Although the first stage of the Gautami power station project in Andhra Pradesh with equity interest of 19.5%, has been completed substantially in September 2006, it has not commenced commercial operations due to the unavailability of natural gas.
- Maytas Holdings, a promoter group company, has applied for the registration of the Maytas trademark and service mark. Has not permitted the use of the trademark for real-estate development. One of the related companies has exclusive rights to use the Maytas trademark for real-estate development. The promoter group has about 41 companies.
- For the KVK Nilachal power station project in Orissa, with equity interest of 50%, the current coal supply is not sufficient to operate the plant at its contracted capacity. The project consists of 2 x 300 MW coal-based thermal power plant. KVK Nilachal Power currently estimates that a 300-MW power station will require 1.59 million tonnes of low grade thermal coal to maintain 80% plant-load factor (PLF). Till date, coal linkage of only 1.2 million tonnes has been obtained.
Valuation
Between FY 2003 – FY 2007, unconsolidated revenue has shot up from Rs 118.13 crore to Rs 601.01 crore. In the same period, operating profit margin OPM has improved from 5.1% to 16.1% due to increase in investment in equipment and manpower, leading to reduction in subcontracting of jobs. Thus, unconsolidated net profit has increased at much faster pace: from Rs 0.32 crore to Rs 55.01 crore. This growth has also been boosted due to increase in profit from participation in unincorporated joint ventures undertaking larger contracts.
There are two sets of consolidated financial statements: one as per tow accounting standards (AS). As per AS-23 (which is intended to be followed), consolidated profit is lower and debt/equity ratio is 1.9:1. As per AS-27 (which the auditors want to adopt), consolidated profit is higher and so also the debt/equity ratio. As per AS-27, consolidated net profit is Rs 52.9 crore and EPS Rs 9. According to AS- 23, consolidated net profit works out to Rs 48.77 crore and EPS Rs 8.3. However, since the intention is to follow AS-23, we have used EPS of Rs 8.3 for valuation. At the offer price band of Rs 320-Rs 370, the P/E range is 38.6-44.6, respectively. The TTM P/E of Construction - Civil / Turnkey – Large is 44.2.
Pre Market Watch
Indian market is likely to have a positive opening as the Asian market is trading higher and US market closed in green. On Tuesday, the Indian markets ended on a positive note as BSE Sensex closed higher by 53.71 points at 16,899.54 while Nifty grew by 14.7 points to close at 4,946. We expect the market to remain range bound during the trading session.
On Tuesday, the US market closed in positive territory. The Dow Jones Industrial Average (DJIA) improved 19.59 points to close at 13,778.65. The S&P 500 (SPX) index decreased by 0.52 points to close at 1,517.21 and the NASDAQ Composite (RIXF) advanced 15.50 points to close at 2,683.45.
Indian ADRs ended in mixed. In technology sector, Satyam computers grew by (1.82%) along with Wipro and Infosys by (0.58%) and (0.52%) respectively. In banking sector, HDFC bank grew by (0.51%) while ICICI bank fell (0.02%). Tata Motors grew by (0.05%). VSNL and MTNL dropped by (1.27%) and (0.25%) respectively.
The major stock markets in Asia are trading higher. Japan''s Nikkei is trading flat at 16,399.96. Taiwan weighted is trading higher by 131.01 points at 9,236.29. Singapore Strait times trading up by 6.23 points at 3,631.05. Seoul Composite grew by 10.29 points to trade at 1,919.26.
The gross equity purchased was Rs.4,854.20 (in crores), and the gross debt purchased was Rs0.00 (in crores). The gross equity sold was Rs3,569.80 (in crores), and the gross debt sold was Rs0.00 (in crores). The net investment of equity was Rs1,284.40 (in crores) and the net debt investment was Rs0.00 (in crores).
Today, Nifty has support at 4,904 and resistance at 4,995and BSE Sensex has support at 16,780 and resistance at 17,070.
Trading Calls
Buy GMR Infra with a stop loss of Rs 765 for a target of Rs 1016.
Buy Triveni Engineering with a stop loss of Rs 110 for target of Rs 180.
Buy GMR Infrastructure on declines with a stop loss of Rs 840 for a short-term target of Rs 992.
Trading Calls
Buy Bongaigaon Refinery with stoploss of Rs 56 for target of Rs 88.
Buy Oswal Chemical with stoploss of Rs 40 for target of Rs 62.
Buy Reliance Communication with a stop loss of Rs 569 for a short-term target of Rs 650.
Market likely to remain volatile
Subdued Asian indices and sharp intra-day volatility may hold the investors from taking any fresh position. However, overnight gains in the US markets coupled with a bullish sentiment in the present trades could see the market advance further. Among the local indices, the Nifty could test higher levels at 5000 and on the downside it has support at 4850. The Sensex has a likely support at 16650 and may face resistance at 17000.
In the US markets, the broader Dow Jones moved marginally up by 20 points at 13779 after profit warnings from a pair of retailers and a big drop in consumer confidences revived worries about the economic outlook., while the tech-heavy Nasdaq gained by 16 points to close at 2683.
Among the Indian ADRs trading on the US bourses, 6 out of 11 floats ended on a positive turf. Rediff led the upmove and rose 5.88% while Infosys, Satyam, Tata Motors, HDFC Bank and Wipro gained over 0.5% - 1%% each, while Dr Rrddy's Lab, ICICI Bank, MTNL, VSNL and Patni Computers slipped over 0.5% - 2%.
Crude oil prices in the international market slipped below $80, with the Nymex light crude oil for November series slipping by $1.42 to close at $79.53 a barrel. In the commodity segment, the Comex gold for December delivery slipped by 50 cents to settle at $739.30 a troy ounce.
Market to consolidate at higher levels
The market is expected to consolidate at higher levels. Global cues were positive. Asian markets were trading higher today, 27 September 2007. Japan's Nikkei (up 0.17% to 16,429.76), Taiwan Weighted (up 1.44% at 9,236.29) and Singapore's Straits Times (up 0.17% at 3,631.05) rose.
Market may see volatility ahead of the expiry of September 2007 futures & options (F&O) contracts on Thursday, 27 September 2007.
US markets ended mixed yesterday, 25 September 2007 as investors grappled with concerns about consumer spending in some parts of the economy while technology stocks showed broad gains. The Dow Jones industrial average rose 19.59 points, or 0.14%, to 13,778.65. Broader stock indicators were mixed. The Standard & Poor's 500 slipped 0.52 points, or 0.03%, to 1,517.21, while the Nasdaq Composite rose 15.50 points, or 0.58%, to 2,683.45.
As per provisional data, foreign institutional investors (FIIs) purchased shares worth a net Rs 1496.14 crore, while domestic institutional investors (DIIs) were net sellers of shares worth Rs 516.43 crore on Tuesday, 25 September 2007
Crude oil prices rose on Wednesday, 26 September 2007 after three days of losses, with traders looking toward data expected to show a further decline in U.S. crude stocks. US crude for November delivery edged up 22 cents to $79.75 a barrel while London Brent crude gained 22 cents to $77.84 a barrel.
Sensex gained 53.71 points or 0.32% at 16899.54, a record closing high, on Tuesday, 25 September 2007. The S&P CNX Nifty gained 6.65 points or 0.13% to 4,938.85, a record closing high, on that day. It hit an all-time high of 4,953.90 in intra-day trade on that day.
A tug-of-war in US Market
Though housing data beats expectation, consumer confidence slips
Concerns about overall economic environment weighed on investors’ minds today, Tuesday, 25 September 2007 and US market ended relatively flat. Reduced sales forecast from top two retailers put market in a tug-of war situation for most part of the day. Market closed mixed. Financial and energy stocks continued to be the laggards with technology trying to offset their effect.
The Dow Jones industrial Average closed higher by 19.6 points at 13,778.7. The Nasdaq Composite Index, finished higher by 15.5 points at 2,683.45. S&P 500 finished marginally lower by 0.52 points at 1,517.21.
Fifteen out of thirty Dow stocks ended in green today. Microsoft, IBM, Boeing and United Technologies led the team of Dow winners. Home-Depot, Wal-Mart, Mc Donalds and Caterpillar were the main Dow laggards.
Retailer, Lowe's today said that it expects FY07 earnings to be at the low end of prior guidance, or slightly below. Another retailer, Target, citing weak guest traffic, lowered its September same-store sales growth forecast to a range of 1.5% to 2.5% from 4.0% to 6.0%. This initiated a wave of selling interest in the early market hours.
Technology sector continued to be in the forefront with Apple, Yahoo and Microsoft shares gaining more considerably. While Microsoft was up by 1.5%, following the launch of its flagship videogame, Halo 3, Apple was by more than 3%. Cisco Systems reached a six year high.
Retailers start a wave of selling ineterst
When market opened in the morning, sellers took position with disappointing news from the retail sector. Dow was down by almost 15 points.
On the top of it, home developer, Lennar posted a sizable loss of $3.25 per share for its third quarter and said it plans on cutting more staff in the fourth quarter.
The Conference Board reported that its Consumer Confidence index slipped to 99.8 in September versus 105.6 in August. But this was not surprising given the rising oil prices in recent days.
National Association of Realtors reported that existing-home sales fell in August for the 13th month in a row. Sales of existing homes fell 4.3% to a seasonally adjusted annual rate of 5.50 million in August, the lowest in five years. Nevertheless, the figure topped expectations of a 5.49 million count.
Among Indian ADRs, Rediff.com continued to be the top gainer for second consecutive day gaining 5.8%. Patni Computers was the topmost loser today shedding 2.3%.
Crude slips below $80
Crude oil prices fell back below $80 today after production resumed after a storm passed through the Gulf of Mexico. The Gulf accounts for about 25% of U.S. With this, crude slipped for the third consecutive day.
Crude-oil futures for light sweet crude for November delivery closed at $79.53/barrel (lower by $1.42/barrel or 1.82%) on the New York Mercantile Exchange. Crude oil fell as low as $78.96 a barrel on the New York Mercantile Exchange today as output increased in the Gulf. Prices are up 29% from a year earlier.
At the New York Stock Exchange, nearly 1.3 billion shares were exchanged, with declining stocks topping advancers about 10 to 7. At the Nasdaq, more than 1.8 billion shares traded, and declining issues ran ahead of advancers 4 to 3.
For tomorrow, the energy inventory report is expected at 10.30 am at Washington. The Mortgage Bankers' Association will release its latest measure of mortgage applications before market opens. Domestic manufacturers will report the newest orders, providing a glimpse into the manufacturing sector's health.
Grey Market - Saamya Biotech, Supreme Infra, MAYTAS Infra
Power Grid Corporation 44 to 52 22 to 23
Dhanus Tech. 280 to 295 80 to 90
Koutons Retail 370 to 415 90 to 95
Consolidated Construction 460 to 510 190 to 200
Supreme Infra 95 to 108 60 to 65
Saamya Biotech 10 8 to 9
MAYTAS Infra 320 to 370 160 to 165
Circuit Systems (India) Ltd. 35 4 to 5
Kaveri Seeds 150 to 170 13 to 15
Morning Call - Sep 26 2007
Market Grape Wine :
In House :
Nifty at a supp of 4904 and 4876 with resis at 5017
Intra Day: Buy Bharatforge above 282 with a TGT of 296 and a SL of 270
Buy Neyvelilignite above 107 with a TGT of 117 and a SL of 103
Positional Buy: Monnet Ispat and Tatasteel
Out House :
Markets at a support of 16453 & 16363 levels with resistance at 17071 & 16996 levels .
Buy : RIL
Buy : Relcap
Buy : IDBI bullet
Buy : SBIN
Buy : RNRL , TTML , IFCI , Nagarfert & JpHydro bullet with strict stop loss
Buy : Grasim
Buy : ABAN
Buy : JpAsso
Buy : IndiaCement
Dark Horse : RIL , Rnrl , Aban , JpHydro , RelCap , SBIN & IDBI
Bullet for the Day : IDBI & Gmrinfra with stop loss .
Daily Technical Analysis
Nifty — The index opened on a flat note; it witnessed range-bound trading for the day’s trading session. The index ended the day with gains of 7 points.
Indecision — On the daily candle chart the index has formed a “doji,” which signifies indecision (day’s opening and closing around same levels at 4939). Yesterday’s high of 4954 is intra-day resistance; break above 4954 can see index test 4970 levels. The intra-day support is around 4878; break below 4878 can see it drift down toward 4856 levels.
Conclusion — Expect intra-day strength above 4954 levels.
Turnover surges
Nifty October 2007 futures at discount
Volumes in derivatives segment surged today in the run up to expiry of September 2007 derivatives contracts. NSE’s futures & options segment clocked a turnover of Rs 83677.53 crore compared to Monday (24 September 2007)’s Rs 79397.68 crore.
Nifty September 2007 futures were at 4946.90, a premium of 8.05 points over spot Nifty closing of 4938.85. Nifty October 2007 futures were at 4935, a discount of 3.85 points over spot closing.
September 2007 derivatives contracts expire on Thursday, 27 September 2007.
Trading Calls
Nifty (4939) Sup 4895 Res 4975
Buy ITC (187) SL 183 Target 194, 196
Buy Ranbaxy (424) SL 420 Target 432, 435
Buy ZEE (313) SL 308 Target 321, 324
Sell Parsvnath (339) SL 343 Target 331, 329
Sell SRF (143) SL 147 Target 136, 133
So near...17K for Sensex, 5K for Nifty!
Fast is fine, but accuracy is everything.
The recent rally may well be the fastest 1000-point run gain one can remember. When speed is the key, safety should not be left behind. But hell to all concerns for the day and hopefully we'll Look at cheering a new milestone for the key indices. The Sensex just needs to crack a ton (100 points) to hit the 17k mark, while the Nifty will need to score another 60-odd points more to attain 5k. The undertone has been bullish since late August, and last week's Federal Reserve's move has only improved the outlook for emerging markets like India. FII inflows have crossed $1.5bn in the past five days, topping the $11bn mark for the year. There are still three more months to go in the year.
Indications from the F&O segment are also positive, though the record open interest of Rs1 trillion could pose some trouble whenever a correction happens. So, avoid over leveraging at this stage and wait for the next round of quarterly results before taking a broader call on the market. Valuations are not cheap after the sharp run-up in the past several sessions. A whole host of stocks have rallied without any significant events backing up the meteoric rise. All these may be signs of some softening though the overall outlook remains upbeat. Today, we expect a flat to slightly positive opening and wild intra-day gyrations as usually is the case during a derivative expiry week.
A long day is in store and it remains to be seen whether the new milestones will be achieved or will it be so near yet so far!
Media Video and Pantaloon Retail will announce their audited results today. STC India will consider a bonus issue today.
BAG Films could gain as Fidelity has picked up more than 10mn shares of the television software company.
US technology shares climbed on Tuesday, but the broader market was subdued following profit warnings from a couple of retailers and grim reports on consumer confidences and home sales.
Oil prices dropped below $80 a barrel. Gold prices slipped. Treasury prices rose, lowering the corresponding yields. The dollar slumped against the euro anew.
The S&P 500 finished flat at 1,517.21. The Dow Jones Industrial Average rose 19.59 points, or 0.1%, to 13,778.65. The Nasdaq Composite Index added 15.50 points, or 0.6%, to 2,683.45, helped by a 1.7% gain in Microsoft.
About eight stocks dropped for every five that rose on the New York Stock Exchange.
Target Corp. and Lowe's Cos. reduced their earnings forecasts, heightening concern that the housing slump has slowed consumer spending.
Target, the second-largest US discount chain, fell the most in six weeks after slashing its projection for September sales. Lowe's, the second-biggest home-improvement retailer, posted its steepest decline since 2003 after saying earnings this year may miss its previous forecast.
Lennar Corp., the largest US homebuilder, sank to a four-year low on the worst quarterly loss in its history.
The September consumer confidence report showed a bigger-than-expected drop to 99.8, down from an upwardly revised 105.6 in the previous month. Existing home sales fell to a five-year low in August, while July home prices posted the biggest monthly drop in 16 years.
GM resumed contract talks with the United Auto Workers union one day after the UAW launched a nationwide strike against the automaker. Microsoft shares rose after the launch of its Halo 3 video game at midnight.
Treasury prices rose modestly, with the yield on the 10-year note at 4.63%, little changed from late on Monday. In currency trading, the dollar fell against the euro and also inched lower versus the yen. COMEX gold for December delivery fell 50 cents to settle at $738.80 an ounce.
US light crude oil for November delivery lost $1.43 to settle at $79.53 a barrel in New York. Last week, the October contract settled at a record high of $83.32.
European shares lost some ground. The pan-European Dow Jones Stoxx 600 index declined 1.1% to 372.42. In London, the commodity-heavy FTSE 100 closed down 1.1% at 6,396.90. The French CAC-40 fell 0.9% to 5,641.59 and the German DAX 30 lost 0.2% at 7,769.44.
In the emerging markets, the Bovespa in Brazil was up 0.2% at 58,858 while the IPC index in Mexico was down 0.8% at 30,294. The RTS index in Russia tumbled 1.6% to 2008 and the ISE National-30 index in Turkey dropped 1.3% to 67,059.
Asian markets were flat to lower in early trading. Weak data on US home sales and consumer confidence fueled speculation that the Federal Reserve will slash rates further to bolster the world's largest economy. A regional benchmark touched a two-month high.
The Morgan Stanley Capital International Asia-Pacific Index gained 0.2% to 159.04 at 10:40 a.m. in Tokyo, set for the highest close since July 26. An index of financial shares posted the biggest gain among the MSCI's 10 industry groups.
The Nikkei 225 Stock Average added 0.2% to 16,426.98 in Japan, where the government today reported that the trade surplus more than tripled in August. Taiwan's Taiex index climbed 1% on the island's first trading day this week, the best performance in the region.
Markets in Hong Kong and South Korea are shut today.
Markets staged an impressive recovery in a highly volatile session led by index heavyweights like Reliance Industries, HDFC Bank, Bharti Airtel and Hindustan Unilever. Benchmark Sensex recouped over 200 points and NSE Nifty recovered over 50 point’s from their respective lows. IT stocks ended with modest gains after rupee, which reached a nine- year high yesterday, paused its advance on speculation the central bank will sell the currency to curb a rally that is eroding export earnings. However, Others like Realty, Auto and Capital Good stocks were offloaded.
Finally, BSE 30-share benchmark Sensex ended 53 points higher to close at 16899. NSE Nifty added 6 points to close at 4938.
HCC slipped by 3% to Rs143. The company is in joint venture with Alpine Mayreder and Samsung Corporation bagged a prestigious contract worth Rs7.7bn from DMRC. The scrip has touched an intra-day high of Rs148 and a low of Rs141 and recorded volumes of over 7,00,000 shares on NSE.
Opto Circuits gained by 1% to Rs569 after reports stated that the company would drawn up plans to enter the US market with a range of cardiac care products. The scrip touched an intra-day high of Rs579 and a low of Rs561 and recorded volumes of over 1,00,000 shares on NSE.
Gayatri Projects marginally gained by 0.5% to Rs310 after the company announced that they have secured new order valued Rs1.54bn. The scrip touched an intra-day high of Rs319 and a low of Rs305 and recorded volumes of over 1,00,000 shares on NSE.
BPCL has surged by over 9.5% to Rs357 on reports of Assam Gas Discovery. The scrip has touched an intra-day high of Rs360 and a low of Rs333 and has recorded volumes of over 2,00,000 shares on NSE.
Tata Power gained by 0.3% to Rs836 as reports have stated that the company would pick up 15% stake in power exchange to be set up by NCDEX and NTPC. The scrip touched an intra-day high of Rs842 and a low of Rs814 and recorded volumes of over 5,00,000 shares on NSE.
GAIL dropped by 3.2% to Rs363. According to reports the company has announced its plan to explore options for strategic co-operation with BPCL for petrochem and E&P activities. The scrip touched an intra-day high of Rs382 and a low of Rs357 and recorded volumes of over 15,00,000 shares on NSE.
Pharma stocks ended higher following reports that National Pharmaceutical Pricing Authority decided to revise prices of over 200 life saving medicines. Ranbaxy gained 1.8% to Rs424, Galxo was up by 0.6% to Rs1125 and Sun Pharma added 0.2% to Rs951.
IT stocks bounced back after rupee, which reached a nine- year high yesterday, paused its advance on speculation the central bank will sell the currency to curb a rally that is eroding export earnings. Satyam Computer gained by 0.8% to Rs412, Infosys advanced by 0.5% to Rs1771 and NIIT Ltd added 1.1% to Rs147.
Telecom stocks were a mixed bag. Reports stated that Department of Telecommunications is setting up an internal committee for developing guidelines for companies seeking fresh unified access service licenses. Bharti Airtel surged 2% to Rs962. However, R Com slipped 0.5% to Rs594 and Idea was down 2% to Rs125.
Realty stocks were badly beaten up on back of profit booking. Akruti dropped by 5% to Rs705, HDIL was down by 4% to Rs608, DLF slipped by 2% to Rs765 and Parsvnath lost 2.7% to Rs339.
Auto stocks were also in the reverse gear. Hero Honda lost 3% to Rs744, M&M was down by 2.3% to Rs765, Bajaj Auto declined 1.8% to Rs2529 and Tata Motors dipped 1% to Rs741.
Stocks in News:
The RBI has allowed corporates, individuals and mutual funds to invest more overseas. It has also increased ECB prepayment limit for companies up to $500mn.
Essar Communications plans to raise $3.6bn in term loans against put options that exist in the Vodafone-Essar agreement.
Wipro has reportedly bagged $130mn five year contract from British utility Thames Water.
Reliance Fresh has decided to shut shops in UP owing to the mass opposition from local shopkeepers and traders.
SRF will set up a new polyster industrial yarn spinning unit with an annual capacity of 14500 tonnes at its existing Gumminipoondi plant in Tamil Nadu.
Arcelor Mittal aims to invest $20bn for building two 12mn tonnes steel plants in India.
PFC has invited preliminary bids from prospective developers for setting up the Ultra Mega Power Project at Tilaiya in Jharkhand.
Hindustan Unilever announced that the buy back of 551.6mn shares at up to Rs230 would begin from October 3.
Pfizer has been asked by NPPA to reduce prices of two drugs, Benadryl and Caladryl.
IT companies have indicated that billing rates for new contracts will go up by 3-4% and the old ones by 2-3%, to rein in margin pressure.
Fund Activity:
FIIs were net buyers of Rs14.96bn (provisional) in the cash segment on Wednesday and the local institutions pulled out Rs5.16bn. In the F&O segment, foreign funds were net buyers of Rs855.5mn.
On Tuesday, FIIs were net buyers to the tune of Rs12.84bn in the cash segment. With this, their net investment in Indian shares in the past five days to more than US$1.5bn.
Major Bulk Deals:
Morgan Stanley has sold Patni Computer. There are no other major bulk deals.
Upper Circuit:
Accel Frontline, RIIL, Bag Films, Gremac Infrastructure, Jayant Agro, Crazy Infotech, Ruby Mills, IID Forgings, Jai Corp, Marathon Nextgen and BF Utilities.
Lower Circuit:
Post Market Commentary
The Sensex opened with a positive gap of 45 points at 16,891, and soon touched a new all-time intra-day high of 16,928 - just 72 points shy of the 17,000-mark.
Profit-taking at higher levels saw the index pare gains and drop into red to a low of 16,677 - down 251 points from the day's high. However, the index rebounded into the positive zone on the back of fresh buying at lower levels.
The Sensex finally ended with a gain of 54 points at a record 16,900.
The BSE Oil & Gas index gained 1.3% at 9778. The Realty index, however, dropped 3% to 9085.
The market breadth was negative - out of 2,816 stocks traded, 1,654 declined, 1,111 advanced and 51 were unchanged today.
INDEX MOVERS...
HDFC Bank soared nearly 4% to Rs 1,398. Hindalco surged 3% to Rs 168.
Bharti Airtel rallied over 2% to Rs 965. Reliance and Ranbaxy moved up 1.8% each to Rs 2,400 and Rs 424, respectively.
Hindustan Unilever advanced 1.5% to Rs 227. Cipla and Maruti were up over 1% each to Rs 169 and Rs 991, respectively.
...AND THE SHAKERS
Mahindra & Mahindra plunged 2.6% to Rs 763. Bajaj Auto slipped over 2% to Rs 2,519.
SBI and Wipro dropped 1.6% each to Rs 1,804 and Rs 436, respectively.
Larsen & Toubro is down over 1% to Rs 2,865.
VALUE & VOLUME TOPPERS
IFCI topped the value chart with a turnover of Rs 449 crore followed by Reliance Natural Resources (Rs 441.60 crore), J P Hydro-power (Rs 275.30 crore), Reliance Petro (Rs 266.60 crore) and Reliance Energy (Rs 238.50 crore).
Reliance Natural Resources led the volume chart with trades of around 4.72 crore shares followed by IFCI (4.42 crore), Ispat Industries (4.33 crore), J P Hydro-power (3.70 crore) and Tata Tele (2.76 crore).
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