Dr Reddy's - (Q2FY08 Result Review): Hold
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Friday, October 26, 2007
Trading Calls
Buy Sterlite Industries with a stop loss of Rs 870 for a targets of Rs 970 and 1163.
Buy IDFC with a stop loss of Rs 170 for a target of Rs 245.
Buy GVK Power and Infra with a stop loss of Rs 670 for a short-term targets of 745-765
Sensex regains 19K level; ends with a new high
The benchmark Sensex regained 19,000 points level on the Bombay Stock Exchange on Friday on aggressive buying by funds, discounting the market regulator's move yesterday's to restrict foreign funds inflow, and closed at a new peak of over 19,243 points.
The Sensex, which had plummeted in past few sessions from record 19,000 points level, bounced back by 472.28 points to 19,243.17, another record peak set in today's trade, surpassing the previous closing record set on October 15.
It touched the day's high of 19,276.45 and a low of 18,629.53 points.
Similarly, the wide-based National Stock Exchange index shot up by 133.35 points at 5702.30, after touching a high of 5716.90 and a low of 5513.35 points.
Marketmen said the trading activity picked up in later half of the day after the Finance Minister P Chidambaram said moves to restrict foreign investment in stocks yesterday were aimed at slowing capital flows from overseas that have caused a spurt in shares and the currency.
Capital goods stocks were the star performers as the segment index gained 1226.02 points at 18,540.15 followed by Bank segment index by 349.42 points at 10273.53.
Weekly Close: Large cap's in rampage again!
In between the clouds of worries over P notes indices hovered to new high at the end of the week. There was a bit of caution ahead of SEBI meet with FIIs on P notes. Lack of clarity on P notes saw some outflow of fund but interest continued from domestic fund though many of them are on the sideline to get in. Quarterly Results added to the sentiments. Banking and Capital goods were the major index driver. L&T and Suzlon were the star performer for the week with their results. SBI gained on some rights issue. On the second last day SEBI announced that sub-account holders can not issue P-notes. As per the rule they will have to register first and then invest. It had some impact in the start, but, markets recovered strongly. But we think this would affect incremental views almost immediately. The date to decide the assets under control is a month back and that means that the extra $ 2-3 bn which has come in October created some winding down already.
On Political front: For now politics also seems to be on kind. Govt. is seems ready to miss the nuclear bus. Elections have been delayed for another 18 months and that?s probably good news in terms of stability. However it may not be on the policy front.
There are 2 major events scheduled next week i.e the RBI credit policy and Fed Meet which could drive the market. US Indices traded ranged with Crude hovering over $91 a barrel and mixed economic data. Fall in orders for Durable goods as well the raise in Jobless claim dampened the sentiments while jump in new home sales brought in some relief. The Market hopes Fed to cut rate by 50 bps. While in India there no cut expected as of now. Let wait and watch these events.
Crude rallied for the week as it crossed $90 a barrel which could push the panic button. The airlines are biggest hit really. They were hoping for good occupancy and some benign prices. Negatives also seen for Paint and Tyre companies.. On the Currency front, Rupee continues to trade below $40 a Dollar.
Sensational week in the market with Sensex Closing above 19200 levels. Sensex and Nifty both Zoomed over 10% for the week.
Sensex Weekly Gainers were LNT (28.51%), SBI (25.39%), REL (25.33%), BHEL (18.67%),Tata steel (16.83%), ICICIBank (16.21%), HDFC bank (13.61%) and Hindalco (11.22%). Losers for the week are TCS (-2.97%), Infosys (2.94%), Bajaj Auto (0.34%), Drreddy (0.38%), , Wipro (0.22%).
Companies which we tracked have shown phenomenal results: Apollo Tyres which managed to delivery super profits in rough conditions. Topline grew by 10% on yoy basis to Rs 847 cr. Net profits grew by whopping 164% on yoy basis to Rs 51 cr v/s 19.3cr last year same quarter. The number came out marvellous even though the rubber remained in the range of Rs86-Rs92. It gave good result on the economies of scale with the Dunlop South Africa as well increasing its capacity to 710 Tonne /per day and including South Africa?s capacity to 890/per day.
Blue Star India ltd reported good sets of numbers with topline line growth of 46% yoy from Rs 376 cr last year to Rs 548 cr for the quarter ended September 30, 2007. The company?s net profit for the quarter grew 150% to Rs 46 cr. Segment wise performance for the company was impressively in all 3 lines of business. The central and packaged airconditioning business accounted for 73% of total revenues during the quarter. The revenues from this segment grew by 48% during the quarter while the PBIT profits increased by a substantial 105%. Margins also improved significantly from 10.2% last year same quarter to 14.2% this quarter. The order book position as on September 30, 2007 stood at Rs 1031 cr. With healthy order book and a good outlook we see Blue Star heading for a good year. But can it take the same for the coming years, well we will have to wait and see. Do keep an eye here we will update you more here.
Kewal Kiran clothing Ltd (KKCL) reported a healthy result for the quarter ending September 2007 The company managed to achieve top line growth of 10% from Rs 42 Cr to Rs 46 Cr YOY. KKCL?s flagship brand ?KILLER? has contributed 50% towards total sales and in total sold 0.82 million pieces this quarter. EBIDTA margin for the quarter was same at 24%. Net margin was also in line with the last corresponding quarter at 17%. Domestic sales contributed almost major part more than 95%. Net realization per garment witnessed a growth of 6% to Rs 562 per garment (QoQ) basis KKCL now has about 75 retail stores which accounted for 20% of its revenues and intends to open 16+ more stores which will be opened before Diwali. We believe that branding is key success factor for these products but whether KKCL will continue to retain this brand image as many other well known brands are entering into the growing market that has to been seen further. Valuations are expensive at this price. We will update you more here.
Austin Engineering Ltd reported a flat result for the 2nd quarter FY07. The revenues grew by 3% to Rs 17.58 cr and the net profits grew by 14% to Rs 1.64 cr on yoy basis. The Ebidta margins stood at 18%, higher by 100 bps and the Ebidta profits grew by 13% to Rs 3.21 cr on yoy basis. The higher efficiency and better economies of scale helped the company to maintain margins. We had a word with the management and they informed us that plant had been shut down for one week due to flood in the city. As a result of this company?s sales slipped. Valuation seems to be attractive at the current market price of Rs 126, the stock trades at 7 times of trailing earnings. We are positive on company and its business; one can enter that stock at dips looking at long term prospects.
Technically Speaking: Sensex has shown tremendous strength in this week, closing at the all time high. The strength is still mostly concentrated in the large caps. We see sensex reaching the 20k figure soon. The immediate resistance are seen at 19475 and 19610. And Support seen at 18830 and 18545..
Sensex storms past 19K as capital goods rally
Continuing on a cautious note, the market witnessed another round of selling as the Sensex lost over 141 points form the previous day's close to touch the intra-day low of 18630. However, the market recovered thereafter as brisk buying in front-line shares pushed the benchmark index to an all-time high of 19,275. Capital goods stocks led the rally after sector heavyweight Larsen and Toubro posted a whopping 73% rise in net profit from the previous quarter. Stocks also rallied as the Securities and Exchange Board of India had dispelled confusion on curbs on P-notes yesterday. The Sensex finally closed near its all-time high with a gain of 472 points at 19243, while the Nifty ended the session by adding 133 point at 5702.
The market breadth was positive. Of the 2,833 stocks traded on the BSE, 1,737 stocks advanced, 1,028 stocks declined and 68 stocks ended unchanged. Among the sectoral indices, the BSE CG Index was the major gainer and rose 7.08% followed by the BSE PSU Index that added 3.93% and the BSE Bankex Index that gained 3.52%. However, the BSE FMCG Index shed 0.28%.
Among the major gainers, L&T jumped 12.40% at Rs3,885, SBI added 7.53% at Rs2,091, BHEL shot up by 6.35% at Rs2,435, ONGC flared up 4.12% at Rs1,160, M&M moved up 3.82% at Rs802, ICICI Bank advanced 3.81% at Rs1,190, Satyam Computer scaled up 3.68% at Rs477 and Reliance Industries surged 2.42% at Rs2,692. However, Bharti Airtel dropped 2.66% at Rs993, ITC slipped 1.42% at Rs180, HLL fell 1.34% at Rs218 and Ranbaxy shed 1.15% at Rs425.
Capital goods stocks were in the limelight today. Laxmi Machine Works flared up 14.98% to Rs3,171, Crompton Greaves rose 7.44% at Rs420 and Kalpataru Power scaled up 6.81% at Rs1,795.
Over 2.75 crore Reliance Natural Resources shares changed hands on the BSE followed by Himachal Futuristic Communication (2.05 crore shares), Reliance Petroleum (2.03 crore shares), Tata Teleservices (1.57 crore shares) and Power Grid Corporation (1.46 crore shares).
Value-wise L&T clocked a turnover of Rs433 crore followed by Reliance Petroleum (Rs404 crore), Reliance Industries (Rs363 crore), Reliance Natural Resources (Rs272 crore) and Reliance Energy (Rs265 crore).
FII inflow, RBI policy review outcome to dictate trend
Trend in inflow from foreign funds will dictate the near term trend on the bourses. The market on Friday, 26 October 2007, shrugged off Securities & Exchange Board of India (Sebi) directive on restriction of participatory notes (PNs) that came into effect from 26 October 2007. Sebi has banned fresh issuance of PNs with derivatives as underlying and it has also ordered winding up such PNs in 18 months, besides putting curbs on such issue of PNs in the spot market.
According to Citigroup, given the limited headroom available due to the 40% limit on issue of PNs, return to 'regulated' entities rule, and the time it might take for the entities to get FII registration, the new Sebi norms may significantly reduce near term foreign flows. Sebi has proposed an incremental rate of 5% for issue of PNs for FIIs with less than 40%t of assets under custody (AUC) in PNs. Those with over 40% of assets in PNs can issue PNs only against redemptions or cancellations.
Kotak Institutional Equities, in a note, states that it does not expect any major impact of the new policy on the market and it is of the opinion that the market has largely absorbed the changes in PN norms. ‘We rule out any major selling in the market and expect a smooth transition to the new regime’, it has said in a note to clients adding that while Sebi has banned sub-accounts of FIIs from issuing further PNs, PN issuing sub-accounts FIIs have already started the process of conversion to FIIs. There is no ban on issue of PNs by FIIs though restrictions have been put in place for them. There is a ban of fresh issue of PNs with derivatives as underlying.
Providing a major relief over the issue, Sebi on Monday, 23 October 2007, said sub-accounts which intend to covert into foreign institutional investor status have to sent their letter of intent to the regulator within 24-hours. Sebi later said that all the 20 PN issuing FII sub-accounts have expressed intent to convert into foreign institutional investor (FII) status. There are 34 PN issuing entities in the country, of which some are already FIIs. This number was 14 in March 2004.
FIIs can now issue PNs only to foreign entities which are ‘regulated’ in their respective jurisdiction and not to those that are merely ‘registered’ in the jurisdiction as was the norm earlier. This will mean that some hedge funds that are not regulated in their home country will find it difficult to invest in the Indian market. Users of PNs are largely hedge funds, a fast-growing asset class globally in recent years. Nevertheless, such hedge funds can apply for direct registration with Sebi.
Sebi says PNs allow foreigners to make a backdoor entry into the market, and it wants them to register to create greater transparency on inflows. PNs are financial instruments used by foreign investors that are not registered with Sebi, to invest in Indian shares. FIIs and their sub-accounts buy Indian securities and then issue PNs to foreign investors with these securities as the underlying.
Besides some key Q2 September 2007 results, the major events next week are Mid-Term Review of Annual Policy by the Reserve Bank of India on Tuesday, 30 October 2007, and policy meeting of the US Federal Reserve on 31 October 2007. Bank of Japan also holds its policy meeting on 31 October 2007.
Market men see no change in interest rates by RBI in Mid-Term Review of Annual Policy on Tuesday. It remains to be seen whether RBI raises cash reserve ratio so as to suck out excess liquidity in the banking system.
There are hopes that the US Federal Reserve will cut interest rates again at its policy meet on 31 October 2007, given the recent weak US economic data. A further cut in interest rate by Fed, if any, will only add to global liquidity which already remains high. This in turn will ensure that FII inflow in India will continue even as their buying vigour may not be as strong as was recently due to Sebi restrictions on PNs.
Key Q2 September 2007 results next week Maruti Suzuki, Bharat Heavy Electricals, HDFC and Mahindra & Mahindra on Monday, 29 October 2007, ONGC, Steel Authority of India, Tata Power, DLF on Tuesday, 30 October 2007, and Tata Motors on Wednesday, 31 October 2007. On Saturday, 27 October 2007, NTPC, Grasim, State Bank of India will unveil Q2 results.
Sensex vaults 1,683 points
A partial breather provided by Securities & Exchange Board of India at the onset of the week with respect to participatory notes boosted the bourses. Expectation of a further cut in interest rate by the US Federal Reserve also aided rally on the domestic bourses last week. The Sensex gained on all the five trading sessions in the week. Securities & Exchange Board of India, on Thursday, 25 October 2007, put restrictions on issue of participatory notes (PN) and directed some exiting PN positions to be wound up within 18 months.
The BSE Sensex rose 1,683.19 points or 9.59% to 19,243.17 in the week ended Friday, 26 October 2007. The S&P CNX Nifty surged 487 points or 9.33% to 5,702.30 in the week.
THE BSE Mid Cap index rose 682.08 points or 9.42% to 7,920.66 and BSE Small Cap index rose 750.63 points or 8.53% to 9,550.95 in the week. Both these indices underperformed Sensex.
BSE Auto index (up 6.04% to 5,616.97), BSE IT (down 1.07% to 4,635.58) and BSE (Oil &Gas) (up 8.41% to 11,103.46) underperformed Sensex.
BSE Bankex (up 16.25% to 10,273.53), BSE Capital Goods index (up 20.16% to 18,540.15), BSE Metal (up 15.64% to 16,744.56), BSE Realty (up 10.68% to 10,020.75) outperformed Sensex.
The BSE Sensex rose 54.01 points or 0.31% to 17,613.99 on Monday, 22 October 2007. The market bounced back after an initial slump caused by worries about the US economic outlook. But while the BSE Sensex managed to post gains, the S&P CNX Nifty settled with losses. Volatility was high due to alternate bouts of buying and selling. European and Asian markets were trading lower on worries about the US economic outlook.
The BSE Sensex posted its biggest ever single day point gain of 878.85 points or 4.99% at 18,492.84 on Tuesday, 23 October 2007. The market spurted after the market regulator Securities Exchange Board of India, after trading hours on Monday, 22 October 2007, provided partial breather to FIIs with respect to proposed restrictions on use of participatory notes and said it would speed up regulatory clearance for foreigners keen to invest transparently.
Sebi on Monday, 23 October 2007, said sub-accounts which intend to covert into foreign institutional investor status have to sent their letter of intent to the regulator within 24-hours. Sebi later said that all the 20 PN issuing FII sub-accounts have expressed intent to convert into foreign institutional investor (FII) status. There are 34 PN issuing entities in the country, of which some are already FIIs. This number was 14 in March 2004.
The BSE Sensex closed higher by 20.07 points, or 0.11% to 18,512.91 on Wednesday, 24 October 2007. The Sensex posted gains as investors flocked to blue-chip shares, inspired by robust set of results posted by them for the quarter ended September 2007. All this came on the back of volatility, which remained high ahead of the expiry of October 2007 derivatives contracts on Thursday, 25 October 2007.
The BSE Sensex gained 257.98 points or 1.39% at 18,770.89 on Thursday, 25 October 2007. The market settled on a firm note on buying in index pivotals. However, trade was choppy towards the fag end of the day ahead of expiry of October 2007 derivatives contracts and ahead of Securities Exchange Board of India (Sebi)’s board meeting to take a decision on recently announced proposals to curb forein inflows through the route of participatory notes. European markets and Asian markets were trading with gains.
The Sensex surged 472.28 points or 2.52% at 19,243.17, an all-time closing high on Friday, 26 October 2007. The market surged on renewed buying interest in index pivotals following healthy rollover of derivative positions from October 2007 to November 2007 on Thursday, 25 October 2007. Global cues were mixed. The market shrugged off concerns arising from possible FII sales after market regulator Securities & Exchange Board of India put restrictions on issue of participatory notes (PN) after trading hours on Thursday, 25 October 2007 and directed some exiting PN positions to be wound up within 18 months.
Securities and Exchange Board of India (Sebi), M Damodaran, chairman said on Thursday, 25 October 2007 that there was no change in the draft regulations announced by the regulator last week on participatory notes (PNs). The draft proposals announced on 16 October 2007, had put restrictions on use of PNs. Damodaran, said Sebi would review the position on the issue from time to time.
While announcing rules to curb issue of participatory notes (PNs) by FIIs, the market regulator Securities & Exchange Board of India (Sebi) on Thursday, 25 October 2007, announecd that PNs can now be issued only to foreign entities which are ‘regulated’ in their respective jurisdiction and not to those that are merely ‘registered’ in the jurisdiction as was the norm earlier. This will mean that many hedge funds that are not regulated in their home country will find it difficult to invest in the Indian market.
Finance minister P Chidambaram said on Friday,26 October 2007 the government wanted to moderate capital inflows without hurting growth of the country's economy. The minister’s comments come a day after the market regulator, Securities & Exchange Board of India (Sebi), on Thursday, 25 October 2007, tightened investment rules for unregistered FIIs by clamping down on issuance of indirect investment instruments known as participatory notes (P-notes).
ICICI Bank, the country’s largest private sector bank in terms of net profit rose 15.66% to Rs 1,184.45. Its net profit rose 32.7% to Rs 1002.60 crore on 41% growth in total income to Rs 9588.41 crore in Q2 September 2007 over Q2 September 2006. The results hit the market after trading hours on Friday, 19 October 2007.
India’s largest oil exploration company in terms of market capitalisation Oil and Natural Gas Corporation rose 4.32% to Rs 1056. As per reports that its joint venture firm ONGC-Mittal Energy had acquired a 30% participating interest in an exploration block in Turkmenistan. The report did not disclose the deal value.
India’s largest private sector entity by market capitalisation and oil refiner Reliance Industries (RIL) rose 9.03% to Rs 2,692.25. As a part of a restructuring exercise, RIL has reportedly decided to hive off Reliance Fresh into a separate company, Ranger Farm, for single point accountability. Reliance Fresh sells food, fruits and vegetables and consumer products.
India’s largest pharma company by sales, Ranbaxy Laboratories (RLL) gained 2.06% to Rs 425.15. Ranbaxy on 22 October 2007, that it has received approval in Canada to manufacture and market Ran-Lisinopril 5, 10 and 20 mili gram oral tablets from Health Canada, Therapeutic Products Directorate (TPD). Lisinopril is indicated for the treatment of hypertension.
India’s fourth largest software services exporter Satyam Computer Services gained 3.16% to Rs 474.60. Its net profit rose 7.19% to Rs 417.15 crore on 10.75% rise in sales to Rs 1948.24 crore in Q2 September 2007 over Q1 June 2006. The company declared the results on 23 October 2007. The company revised upwards earnings as well revenue guidance for FY 2008 (year ending 31 March 2008), both in rupee terms and dollar terms.
Satyam Computer Services signed an agreement with Fujitsu Services to provide IT services to Reuters as part of a 10-year, $1 billion internal information systems transformation programme. It also announced that entering into a definitive agreement to acquire 100% stake in Nitor Global Solutions ("NITOR") of the UK, a niche consulting firm providing Infrastructure Management Services (IMS), for up to British pound (GBP) 2.76 million ($ 5.5 million) in cash.
Reliance Energy, the country’s second largest power utility company by sales, rose 25.26% to Rs 1,670. The stock's rise follows chairman Anil Ambani's briefing to the media on 23 October 2007, that Reliance Power will be valued nearly two times its holding company, Reliance Energy, after the mega initial public offer.
India’s leading bank by net profit State Bank of India jumped 24.97% to Rs 2,083.95. On 23 October 2007, SBI Life Insurance Company posted net profit of Rs 14.09 crore for the first half year ended 30 September 2007 with an 80% increase in its total premium collection. SBI Life Insurance has become the first private sector life insurance company to make profit. A 74:26 joint venture between the State Bank of India and Cardif, a BNP Paribas company, it manages assets over Rs 6000 crore.
India's biggest power generation firm by revenue NTPC advanced 13.61% to Rs 228.75 on reports it formed a joint venture with an Indonesian coal producer to ensure fuel supplies for its projects.
World’s sixth largest steel maker, Tata Steel rose 16.31% to Rs 990.60. The stock surged on reports that Tata Steel is looking at investment opportunities in CSN's heartland Brazil. Tata Steel will reportedly in the next few months send a delegation to the Northern Brazilian state of Maranhao in order to evaluate investment opportunities there. Tata Steel’s net profit rose 8.11% to Rs 1,190.83 crore on 11.41% rise in total income to Rs 4,879.41 crore in Q2 September 2007 over Q2 September 2006. The company announced the results on 26 October 2007.
India’s third largest pharma company by sales, Cipla rose 3.82% to Rs 185.It reported 5.73% rise in net profit to Rs 190.62 crore 25.01% rise in total income to Rs 1140.21 crore in Q2 September 2007 over Q2 September 2006. The results were announced on Wednesday, 24 October 2007.
Dr. Reddy's Laboratories, the nations third largest pharma company by market capitalisation, slipped 0.4% to Rs 611.95.It reported a 4.5% fall in consolidated net profit to Rs 267 crore in Q2 September 2007 over Q2 September 2006. Dr. Reddy's total revenue at Rs 1267 crore was 37% below last year's Rs 2004 crore that included Rs 781 crore of one-time gains from exclusive marketing rights for two drugs. The results were announced on 24 October 2007.
India’s largest engineering and construction company Larsen & Toubro (L&T) galloped 28.24% to Rs 3876.80 .It hit an all time high of Rs 3,898 on 26 October 2007. L&T posted 72.95% rise in net profit to Rs 348.02 crore on 43.54% rise in total income to Rs 5,523.27 crore in Q2 September 2007 over Q2 September 2006. The company announced the results on 26 October 2007.
Shares of Bajaj Auto, the country’s second largest bike manufacturer by sales were up marginally by 0.16% to Rs 2,515.55. TVS has reportedly filed a Rs 250 crore defamation suit against Bajaj Auto in the Bombay High Court. This is in reaction to Bajaj's allegation that TVS had infringed the latter's patented DTSi (digital twin spark plug ignition) technology.
India’s largest cigarette maker in terms of sales ITC rose 3.37% to Rs 180.80. It posted 13.42% rise in net profit to Rs 770.87 crore on 18.2% rise in total income to Rs 3,481.63 crore in Q2 September 2007 over Q2 September 2006. The results were announced on 26 October 2007.
Merrill Lynch expects more money to flow to India and China due to high growth in these two economies. The flow of foreign money into Asia remains strong, Merrill Lynch’s recent Investment Strategy Report for Asian Pacific said. Pension funds and insurance companies have missed out on the Asian story so far this decade and are facing diminishing returns elsewhere. They are getting interested in Asia and when they do, it will be large amount of money, the study said.
BSE and NSE will hold a one-hour Diwali Muhurat trading session on beginning of Samavat Year 2064 on Friday, 9 November 20007. Trading will start at 18:00 IST and end at 19:00 IST. The transactions done on the Muhurat trading session will be settled as a separate settlement, BSE has said in a circular.
Commerce minister Kamal Nath said his ministry was preparing a cabinet note on additional tax saving measures for exports. The commerce ministry is looking at "sector specific" measures. Nath is hopeful of meeting the $160 billion export target this year.
According to the state run Spices Board, India's spices export volume expanded 22% to 219,640 tonnes in the April-September 2007. This was due to a healthy demand for chilli and pepper. In value terms, exports jumped 29% to Rs 21 billion.
According to a release issued by the steel ministry on (Tuesday, 23 October 2007) production of finished carbon steel was estimated at 24.80 million tonne in April-September 2007 - a 6.6% growth from 23.256 million tonne in April-September 2006. Output of pig iron improved 7.9% at 2.582 million tonne. Imports of finished carbon steel surged 28.2% to 2.45 million tonne and exports increased 7.4% to 2.60 million tonne in April-September 2007.
According to the Minister of Communications and Information Technology A Raja, IT export turnover is expected to touch the $80-billion mark by end of 2011. The minister was addressing an awards ceremony of Electronics and Computer Software Export Promotion Council (ESC) in New Delhi on Wednesday, 24 October 2007
According to the Telecom Regulatory Authority of India (Trai), gross number of telephones crossed 248.66 million by the end of September 2007 compared with 241.02 million in August this year. A total of 7.64 million telephone connections were added in September 2007. The tele-density reached 21.85% in September 2007 as against 21.20% in August 2007.
The fifth meeting of the United Progressive Alliance (UPA)-Left panel over the Indo-US civilian nuclear cooperation agreement was held in New Delhi on Monday, 22 October 2007. The UPA did not say a definite yes or no on operationising the deal. Earlier in the day, Prime Minister Manmohan Singh had reportedly expressed his embarrassment on the setback in the Indo-US nuclear deal.
Finance Minister Palaniappan Chidambaram while delivering a speech in the Norwegian School of Management on Wednesday, 24 October 2007 observed that India's healthy economic growth has brought forth the challenge of abundant international capital flows and their impact on the domestic economy, particularly on prices and the exchange rate.
The Reserve Bank of India (RBI) extended the timeframe for concessional rates of interest charged by banks on loans obtained by exporters by six months to 30 April 2008. Banks charge interest rates for pre-shipment and post-shipment credit at 2.5% lesser than their prime lending rates (PLR). Lending rates for banks range between 12-14%.
Annual inflation, based on the wholesale price index (WPI), remained unchanged at 3.07% in the week ended 13 October 2007 compared with the week ended 6 October 2007. The market estimate was 3.02%. WPI stood at 5.46% in the corresponding week a year ago. Prices of food articles, like fruits and vegetables, pulses, eggs, meat and fish, climbed up. Manufactured food articles like atta, maida got cheaper.
Record closing high for Sensex, Nifty
The market surged on renewed buying interest in index pivotals following healthy rollover of derivative positions from October 2007 to November 2007 on Thursday, 25 October 2007. Cash market turnover on BSE was just under Rs 9,000 crore. Global cues were mixed.
The Sensex surged 472.28 points or 2.52% at 19,243.17, an all-time closing high. It had opened marginally higher at 18,823.66 and slipped to low of 18,629.53 during the day. It hit an all-time high of 19,276.45 in late trade. At the day’s high of 19,276.45, Sensex had gained 505.56 points for the day.
Its previous all-time high was 19,198.66 struck on 18 October 2007.
The broader based S&P CNX Nifty jumped up 133.35 points or 2.39% at 5,702.30, a record closing high. Nifty hit an intra-day high of 5,716.90 during the day. Its all time high is at 5736.80, which it had struck on 18 October 2007. The Nifty November 2007 futures settled at 5716, a premium of 13.70 points as compared to spot closing
The market shrugged off concerns arising from possible FII sales after market regulator Securities & Exchange Board of India put restrictions on issue of participatory notes (PN) after trading hours on Thursday, 25 October 2007 and directed some exiting PN positions to be wound up within 18 months. The market regulator has put in place a set of regulations to clamp down excessive inflows through participatory notes (PN). The regulator affirmed that sub-accounts would not be allowed to issue PNs and that FIIs will have to unwind PNs with derivatives as underlying in 18 months. Sebi further allowed both regulated and unregulated pension funds, endowments, university funds and charitable trusts to register as FIIs.
PNs are issued by FIIs registered in India to unregistered overseas investors. Registered FIIs buy Indian securities and issue the notes based on the underlying asset.
While announcing rules to curb issue of participatory notes (PNs) by FIIs, the market regulator Securities & Exchange Board of India (Sebi) has also made it clear that PNs can now be issued only to foreign entities which are ‘regulated’ in their respective jurisdiction and not to those that are merely ‘registered’ in the jurisdiction as was the norm earlier. This will mean that many hedge funds that are not regulated in their home country will find it difficult to invest in the Indian market.
The Reserve Bank of India's (RBI) mid-term review of annual policy due on 30 October 2007 and US Federal Reserve’s meeting on 31 October 2007 on interest rates, will be key events that will drive the market in the near term.
The market breadth was strong on BSE: 1,706 scrips advanced as compared to 1037 that declined while 63 remained unchanged. 23 of the 30 members of the Sensex pack were trading with gains.
The BSE Mid-Cap index was up 2.19% to 7,920.66 while the BSE Small-Cap index gained 1.96% to 9,549.62. Both these indices underperformed the Sensex.
Most of the indices on BSE posted gains. Bankex (up 3.52% to 10,273.53), BSE Capital Goods Index (up 7.08% at 18,540.15), BSE PSU index (up 3.93% to 9,227.41), and BSE Oil and Gas Index (up 2.80% at 11,103.46), outperformed the Sensex.
BSE Realty (up 2.18% to 10,020.75), BSE Metal Index (up 1.95% at 16,744.56), BSE Consumer Durables index (up 0.62% to 5,234.25), BSE Auto Index (up 2.06% at 5,616.97), BSE FMCG Index (down 0.28% at 2,128.74), BSE Health Care Index (up 1.38% at 3,885.95), BSE IT Index (up 1.16% at 4,635.58), BSE TecK index (up 0.46% to 3,980.74), were underperformers.
The total turnover on BSE amounted to Rs 8968 crore as compared to Rs 8,456.76 crore yesterday, 25 October 2007.
The NSE F&O turnover was Rs 73836.74 crore as compared to Rs 103930.17 crore yesterday, 25 October 2007
India’s largest engineering and construction company Larsen & Toubro (L&T) galloped 12.40% to Rs 3885 on 11.55 lakh shares. It hit an all time high of Rs 3898 today. It was the top gainer from Sensex pack. L&T posted 72.95% rise in net profit to Rs 348.02 crore on 43.54% rise in total income to Rs 5,523.27 crore in Q2 September 2007 over Q2 September 2006. The company announced the results during the market hours today, 26 October 2007.
India’s largest bank in terms of net profit State Bank of India vaulted 7.53% to Rs 2091. It hit an all time high of Rs 2104.45. After market hours on 23 October 2007, SBI Life Insurance Company posted net profit of Rs 14.09 crore for the first half year ended 30 September 2007 on the back of 80% increase in its total premium collection. A 74:26 joint venture between the State Bank of India and Cardif, a BNP Paribas company, it manages assets over Rs 6000 crore.
Bharat Heavy Electricals (Bhel), the nation's largest power equipment maker in terms of sales soared 6.35% to Rs 2434.70 in anticipation of robust set of results from the company. It will announce its Q2 September 2007 results on 29 October 2007.
India’s largest power generation company by sales, NTPC advanced 2.38% to Rs 228.45. As per reports it is planing to acquire overseas coal blocks with a mining capacity of around 20 million tonnes per annum (mtpa).
Oil & Natural Gas Corporation (ONGC), the country’s largest oil exploration company by net sales advanced 4.12% to Rs 1159.95. As per reports, ONGC which reported gas discoveries on the east coast of India early this year, is planning to sell up to 60% stake in the block to Petrobras of Brazil and State Hydro of Norway.
Auto stocks gained on fresh buying. Tata Motors (up 1.98% to Rs 809), Mahindra & Mahindra (up 3.82% to Rs 802), and Maruti Suzuki India (up 1.38% to Rs 1175.10), were the other gainers from Sensex pack.
India's largest private sector entity by market capitalisation and oil refiner Reliance Industries (RIL) rebounded sharply from day’s low of Rs 2610 to hit a high of Rs 2710. It settled 2.42% higher at Rs 2691.10 on 13.52 lakh shares.
World’s sixth largest steel maker, Tata Steel pared gains from its 52-week high of Rs 1048.80 struck in early trade today. It ended with 0.62% gain to Rs 995. Tata Steel’s net profit rose 8.11% to Rs 1,190.83 crore on 11.41% rise in total income to Rs 4,879.41 crore in Q2 September 2007 over Q2 September 2006. The company announced the results during market hours today, 26 October 2007.
Shares of Bajaj Auto, the country’s second largest bike manufacturer by sales were up marginally by 0.30% to Rs 2503.05. TVS Motor Company jumped 4.32% to Rs 56.80. TVS has reportedly filed a Rs 250 crore defamation suit against Bajaj Auto in the Bombay High Court. This is in reaction to Bajaj's allegation that TVS had infringed the latter's patented DTSi (digital twin spark plug ignition) technology. TVS Motor Company gained 1.93% to Rs 55.30
Bharti Airtel, the country’s largest listed cellular services provider by total subscribers retraced sharply from day’s high of Rs 1044.90. It settled with a loss of 2.66% to Rs 992.80 on 3.77 lakh shares. It was the top loser from Sensex pack
India’s largest cigarette maker in terms of sales ITC slipped from day’s high of Rs 190.75. It closed 1.40% lower to Rs 180.30. It posted 13.42% rise in net profit to Rs 770.87 crore on 18.2% rise in total income to Rs 3,481.63 crore in Q2 September 2007 over Q2 September 2006. The results were announced during the market hours today, 26 October 2007.
Hindustan Unilever (down 1.34% to Rs 217.55), and Ranbaxy Laboratories (down 1.15% to Rs 424.80), were the other losers from Sensex pack
Among side counters, Electrosteel Castings (up 20% to Rs 60.35), Engineers India (up 20% to Rs 726.35), Hind National Glass (up 18.79% to Rs 900), Disa India (up 20% to Rs 1934.20), and OCL India (up 16.47% to Rs 274.75), surged
Tata Steel was the top traded counter on BSE with total turnover of Rs 457.63 crore followed by Larsen & Toubro (Rs 433.33 crore), Reliance Petroleum (Rs 404.76 crore), Reliance Industries (Rs 362.53 crore), and Reliance Natural Resources (Rs 272.20 crore), in that order
Bharat Forge jumped 6.67% to Rs 335.90 on posting 8.94% rise in net profit to Rs 67.74 crore on 25.23% rise in total income to Rs 588.48 crore in Q2 September 2007 over Q2 September 2006. The company announced the results during the market hours today, 26 October 2007.
Educomp Solutions lost 0.53% to Rs 3400. The company today said its net profit jumped 128.14% to Rs 13.62 crore on 63.41% increase in sales to Rs 44.94 crore in Q2 September 2007 over Q1 June 2007.
Kotak Mahindra Bank gained 5.93% to Rs 1,030.90 on reporting 116.6% rise in net profit to Rs 75.38 crore on 99.68% rise in total income to Rs 714.16 crore in Q2 September 2007 over Q2 September 2006. The company announced the results during the market hours today, 26 October 2007.
Deccan Chronicle Holdings eased sharply from day’s high of Rs 220. It closed lower by 0.22% to Rs 203.25 after its board approved a buyback of shares at a maximum price of Rs 250 per share. The board also agreed for private placement of up to 24% in subsidiary Sieger Solutions with a floor enterprise value of Rs 1500 crore and ceiling of Rs 1800 crore.
Idea Cellular slumped 8.55% to Rs 139 after it reported an average revenue per user (ARPU) of Rs 288 per month in Q2 September 2007, which was lower by Rs 32 from Rs 320 in Q1 June 2007. The decline in ARPU was due to lower minutes of use (MOU) and lower revenue per minute (RPM).
i-flex Solutions rose 2% to Rs 1582 on posting 31.58% rise in net profit to Rs 76.58 crore on 13.13%rise in sales to Rs 435.17 crore in Q2 September 2007 over Q1 June 2007. The company announced the results during the market hours today, 26 October 2007.
PTC India galloped 9.15% to Rs 115.70 on reports that private equity firms Goldman Sachs and Macquarie Bank are eyeing 40% stake in the investment arm of the company - PTC Financial Services (PFS). The deal is expected to be in the region of Rs 120 crore.
Sical Logistics soared 7.53% to Rs 247 after Reserve Bank of India allowed foreign institutional investors to buy up to 49% of the paid up capital of the company.
India Infoline spurted 11.51% to Rs 1107. It is reportedly looking at a Rs 200 crore private-equity funding for its recently started consumer finance subsidiary. The deal is expected to be concluded this quarter.
Jaiprakash Associates moved up 12.92% to Rs 1352.90. Recent reports suggest that the company, which is India’s biggest builder of dams, plans to combine its hydroelectric and coal-fired plants into a single company, giving it the flexibility to raise prices and meet demand.
India's wholesale price index rose 3.07% in 12 months to 13 October 2007, matching the previous week's rise which was the smallest in five years, government data released today afternoon showed. The annual inflation rate was 5.46% during the corresponding week of the previous year.
October 2007 derivatives contracts expired yesterday, 25 October 2007. Rollovers were healthy and in-line with the previous two months. As per market data, marketwide rollover of derivative positions from the October 2007 series to the November 2007 series was 84%, while the Nifty rollover was 71%.
Marketwide rollover of derivatives positions from September 2007 to October 2007 was 84% while that of August 2007 contracts to September 2007 contracts was 82.30%. Nifty rollover for September 2007 to October 2007 was 71% and that of August 2007 contracts to September 2007 was 70%.
European markets were trading mixed. Key benchmark indices in United Kingdom (up 0.18% to 6,588.10), and Germany (up 0.02% to 7,934.34) rose while France CAC 40 index slipped 0.09% to 5,755.74.
Asian markets were trading higher today, 26 October 2007. Hong Kong's Hang Seng (up 1.84% at 30,405.22), Japan's Nikkei (up 1.36% at 16,505.63), Taiwan's Taiwan Weighted (up 0.66% at 9,631.51), Straits Times (up 1.74% at 3,771.55) and South Korea's Seoul Composite (up 2.60% at 2,028.06) edged higher.
US markets ended slightly lower yesterday, 25 October 2007, as investors were uneasy about the credit markets and record-high oil prices and took little solace from reports on new home sales and durable goods orders. The Dow Jones Industrial Average slipped 3.33 points, or 0.02%, to 13,671.92. The Standard & Poor's 500 index lost 1.48 points, or 0.10%, to 1,514.40, while the Nasdaq Composite Index lost 23.90 points, or 0.86%, to 2,750.86.
Crude oil prices surged to all-time high of $91.10 a barrel in early trade on Friday, 26 October 2007 bolstered by supply concerns during the northern Hemisphere winter and growing political tensions in Middle East. NYMEX crude for December delivery which had hit a record high of $91.10 barrel, was up 31 cents at $90.77.
Morning Call - Oct 26 2007
Market Grape Wine :
In House :
Nifty at a supp of 5517 and 5468 with resis at 5605 and 5651
Nifty above 5651 could witness a rally of 200~250 points
Intra Day: Buy NIIT Tech above 352 with a TGT of 365 and a SL of 346
Sell NTPC below 219 with a TGT of 210 and a SL of 223
F&O: Buy Pantaloon Retail above 575 with a TGT of 592
Out House :
Markets at a support of 18484 & 18282 levels with resistance at 18976 & 19119 levels .
Buy : RIL
Buy : REL & RPL
Buy : Tisco & Sail bullet
Buy : RComm & RNRL
Buy : Maruti & Telco
Buy : IBUlls & IBullReal
Buy : Centextile
Buy : Skumar & Aban
Dark Horse : ABAN , SKumar , REL , IFCI , RIL , Centextile , Maruti & SBIN
Bullet for the Day : REL & IFCI with stop loss .
TGIF : Thank God Its Friday : Markets at 19k levels book profits at higher levels with crude above 90$ .
Grey Market - Religare, Reliance Power, Varun Industries, Allied Computers
Reliance Power 47.50 to 48
Mundra Port Sez 400 to 440 290 to 300
Circuit Systems (India) Ltd. 35 2.50 to 3
Rathi Bars 35 3 to 3.50
Allied Computers 12 15.50 to 16
Varun Ind. 60 35 to 36
SVPCL 40 to 45 6 to 7
Religare Enterprises 170 to 190 250 to 260
Barak Valley Cement 37 to 42 5.50 to 6
Pre Market Watch
Indian market is likely to have a flat opening for the day, as the market participants are not much happy with the SEBI''s decision on P-Notes. Further the global markets are also giving mixed cues. On Thursday, the benchmark index Sensex ended higher with a gain of 257.98 points to close at 18,770.89, whereas Nifty also closed in green by 72.80 points to close at 5496.15. We expect that the market may trade little volatile with negative bias.
On Thursday, the US markets ended with marginal losses as the Dow Jones Industrial Average (DJIA) closed down by 3.33 points to close at 13,671.92. Further the NASDAQ Composite & S&P 500 (SPX) index also dropped by 23.90 points & 1.48 points to close at 2,750.86 & 1,514.40 respectively.
Indian ADRs also traded mixed. In telecommunication sector, VSNL surged (3.14%), whereas MTNL is down by (2.95%). However, in metal sector, Sterlite Industries is up by (1.83%). Banking sector also ended in red as the ICICI bank & HDFC bank lost (0.29%) & (2.83%). Further technology sector ended mixed. Satyam decreased by (4.15%) along with Patni Computers by (2.90%), whereas Wipro & Infosys surged (1.25%) and (0.29%).
The major stock markets in Asia are trading higher. Hang Seng is trading with the gain of 188.29 points at 30,042.78. Along with this, Japan''s Nikkei is trading higher by 99.71 points to trade at 16,383.88. Singapore''s Straits Times index is also trading positive by 32.14 points at 3,739.28 and Seoul Composite is up by 25.43 points to trade at 2,002.18.
Yesterday, the FIIs performed mixed activity as the gross equity purchased was Rs.6358.50 (in crores), and the gross debt purchased was Rs.10 (in crores) as against the gross equity sold was Rs.4497.40 (in crores) and the gross debt sold was Rs.109.80 (in crores). The net investment of equity was Rs.1861.10 (in crores) and the net debt investment was Rs.-99.80 (in crores).
Today, Nifty has support at 5,399 and resistance at 5,551 and BSE Sensex has support at 18,565 and resistance at 18,870.
Bias remains positive
The market is expected to remain positive with a sideways movement during intra-day trades. The Asian indices are exhibiting a firm trend in the ongoing trades may see the market sentiment remains positive. Among the key domestic indices, the Nifty may rise to 5600 on the upside and has a support at 5400. The Sensex has a likely support at 18000 and may face resistance at 19000.
US indices ended lower for the second straight session on Thursday as record high oil prices in addition to lackluster earnings and economic reports fueling investors' concerns about the US economy. While the Dow Jones slipped by three points at 13672, the Nasdaq moved down by 24 points at 2751.
Barring few, most of the Indian floats finished in the red. Satyam tumbled over 4% while Dr Reddy's, Tata Motors, ICICI Bank, MTNL and HDFC Bank slipped over 1-2% each. While Infosys, Wipro and VSNL ended with a gain of 1-3%.
Crude oil prices rose to record high above $91 a barrel on New York Mercantile Exchange, the highest since trading began in 1983, as unexpected drop in US stockpiles and concerns that supply from Middle East may be disturbed. While the Nymex light crude oil for December delivery rose by $3.36 to close at $90.46 a barrel. In the commodity space, the Comex gold for December series jumped $5.40 to settle at $771 an ounce.
Sensex may strike all time high
The market is likely to extend its gains on the back of positive global cues, healthy rollover of derivative positions from October 2007 series to November 2007 series. However high volatility may not be ruled out. The BSE 30-share Sensex advanced 257.98 points or 1.39% at 18,770.89, on Thursday 25 October 2007. It is now 427.77 points away from its all-time high is at 19,198.66 struck on 18 October 2007. The broader based S&P CNX Nifty rose 72.80 points or 1.32% at 5,568.95, on Thursday 25 October 2007.
Meanwhile in a meeting after market hours on Thursday, 25 October 2007, market regulator Securities & Exchange Board of India (Sebi), in its board meeting has put in place a set of regulations to clamp down excessive inflows through participatory notes (PN). The regulator affirmed that sub-accounts would not be allowed to issue PNs and that FIIs will have to unwind offshore derivative instruments (ODI) positions in 18 months. Sebi further allowed both regulated and unregulated pension funds, endowments, university funds and charitable trusts to register as FIIs.
The Nifty November 2007 futures settled 5535.15, a discount of 33.80 points as compared to spot closing. Nifty October 2007 futures expired yesterday, 25 October 2007. Rollovers were healthy and in-line with the previous two months. As per market data, marketwide rollover of derivative positions from the October 2007 series to the November 2007 series was 84%, while the Nifty rollover was 71%.
Marketwide rollover of derivatives positions from September 2007 to October 2007 was 84% while that of August 2007 contracts to September 2007 contracts was 82.30%. Nifty rollover for September 2007 to October 2007 was 71% and that of August 2007 contracts to September 2007 was 70%.
Asian markets were trading higher today, 26 October 2007. Hong Kong's Hang Seng (up 0.63% at 30,042.78), Japan's Nikkei (up 0.61% at 16,383.88), Taiwan's Taiwan Weighted (up 0.45% at 9,611.39), Straits Times (up 0.87% at 3,739.28) and South Korea's Seoul Composite (up 1.29% at 2,002.18) edged higher.
US markets ended slightly lower yesterday, 25 October 2007, as investors were uneasy about the credit markets and record-high oil prices took little solace from reports on new home sales and durable goods orders. The Dow Jones Industrial Average slipped 3.33 points, or 0.02%, to 13,671.92. The Standard & Poor's 500 index lost 1.48 points, or 0.10%, to 1,514.40, while the Nasdaq Composite Index lost 23.90 points, or 0.86%, to 2,750.86.
The Reserve Bank of India's (RBI) mid-term review of annual policy due on 30 October 2007 and US Federal Reserve’s meeting on 31 October 2007 on interest rates, will be key events that will drive the market in the near term.
As per provisional data, FIIs sold shares worth a net Rs 625.34 crore, while domestic institutional investors (DIIs) were net buyers of shares worth Rs 788.37 crore on Thursday, 25 October 2007.
Crude oil prices surged to all-time high of $91.10 a barrel in early trade on Friday, 26 October 2007 bolstered by supply concerns during the northern Hemisphere winter and growing political tensions in Middle East. NYMEX crude for December delivery which had hit a record high of $91.10 barrel, was up 31 cents at $90.77.
Trading Calls
Nifty (5569) Supp 5497 Res 5670
Buy Ambuja Cem (146) SL 142 Target 153, 155
Buy Axis Bank (869) SL 861 Target 881, 884
Buy Orbit Corp (594) SL 589 Target 606, 609
Sell Sterling Bio (162) SL 165 Target 158, 155
Sell Hexaware (112) SL 115 Target 108, 105
Gardener trims hedges, bulls and bears sit on swing
He who trims himself to suit everyone will soon whittle himself away.
Pleasing everyone is not on the agenda of SEBI. The market regulator has stood firm with SEBI Board upholding the draft norms on offshore derivative instruments (ODIs). While there are positives and facilities for wider participation, the short term anxiety and uncertainty surrounding the issue, especially with regards to hedge funds will remain. And SEBI is not done with the issue. Expect more announcements over a period of time.
As a result, there will be fresh volatility ahead. The street is divided, with some players expecting slowdown in overseas capital inflows and others not too perturbed. Right now, it seems that only the market will show the way forward. We maintain our earlier view of short-term pain and long-term gains, as outlook for the Indian economy remains strong. Bulls will hope the short term means just for the opening session! Intra-day gyrations will remain the order of the day.
After the P-Note issue, the market will now wait for the outcomes of the RBI meeting, on Oct. 30 and the Federal Reserve's meet, on Oct. 31. What the two central banks do will have a bearing on the market. All the more reason for one to be on guard though selective purchases at lower levels can be undertaken. And, don't forget the global trends, especially how the US economy shapes up in the face of the subprime contagion.
Prominent Results Today: Advanta, Allsec Tech, Andhra Bank, Apollo Tyres, Asahi India, AstraZeneca Pharma, Avaya Global, Bata India, BEML, Bharat Bijli, BEL, Bharat Forge, Cadila Healthcare, Clutch Auto, Colgate, CRISIL, Dabur Pharma, Dalmia Cement, Deccan Chronicle, Dredging Corp, Educomp, Emkay Shares, GVK Power, HCC, HDFC, HT Media, ITC, i-flex, ICSA India, ICI India, Indian Hotels, Jindal Stainless, JK Cement, Jyoti Structures, Kale Consultants, Kotak Bank, Lanco Infratech, L&T, Moser Baer, Nagarjuna Fertilizers, Piramyd Retail, Pratibha Industries, Raymond, Tata Steel, Thomas Cook, Tulip IT, TV Today and Valecha Engineering.
US stocks fell for a second day, led by financial shares such as AIG, Countrywide Financial and Merrill Lynch amid persistent worries about the downturn in the housing sector and its broader fallout on the financial markets.
Record high oil prices coupled with lackluster earnings and economic reports fueled investors' nervousness about the health of the world's largest economy.
AIG tumbled to the lowest since August on speculation that the world's largest insurer will report big write-downs related to sub-prime mortgages. Countrywide, the biggest US home-loan company, dropped to a four-year low. Merrill posted its steepest two-day decline since 2002.
Stocks also fell after government reports showed an unexpected drop in durable goods orders and initial unemployment claims topped economists' forecasts, fueling concern that the US economy may slip into a recession.
The S&P 500 Index finished nearly flat at 1,514.4. The Dow Jones Industrial Average lost 3 points, or 0.02%, to 13,671.92. The Nasdaq fell 24 points, or 0.9%, to 2,750.86.
Crude oil rose to a record above $91 per barrel in New York on an unexpected drop in US stockpiles and concern that supply from the Middle East may be disrupted. New US sanctions against Iran, the Turkey-Iraq showdown and a weak dollar helped push prices higher.
Light, sweet crude for December delivery rose as much as 64 cents, or 0.7%, to $91.10 a barrel in after-hours electronic trading on the New York Mercantile Exchange, the highest since trading began in 1983. It traded at $90.97 at 9:26 a.m. Singapore time. Prices are up 51% in a year.
Brent crude oil for December settlement rose as much as $1.32, or 1.5%, to a record $88.80 a barrel in London. It was at $88 a barrel at 9:06 a.m. Singapore time. The contract closed yesterday up $3.11, or 3.7%, at $87.48 a barrel.
Treasury prices ended little changed after an erratic session on Wall Street. In currency trading, the dollar fell against the euro and yen. Comex gold rose $5.40 to $771 an ounce.
After the closing bell, Microsoft reported quarterly earnings that beat analysts' estimates, sending its shares up 5% in extended trading. The Dow component also said it was pumping $240mn in social networking site Facebook, edging out rivals Google and Yahoo, and plans to expand its advertising deal with the site.
European shares advanced. The pan-European Dow Jones Stoxx 600 index rose 1.2% to 381.83, with the telecom sector up 3.7%. The UK's FTSE 100 closed 1.5% higher at 6,576.30, the German DAX 30 gained 1.3% at 7,932.44 and the French CAC-40 advanced 1.5% to 5,760.30.
Latin American equities closed mixed. In Sao Paulo, the Bovespa slipped 0.5% to 62,341.49 and in Mexico City, the IPC index lost 0.5% to 1,886.10. Argentine and Chilean stocks finished higher.
In other emerging markets, the RTS index in Russia rose 1.3% to 2,151 and the ISE National-30 index in Turkey was up marginally at 70,521.
Asian stocks advanced this morning, led by technology shares after Sony and Acer reported earnings that exceeded analysts' estimates and Microsoft raised its profit forecast. BHP Billiton and CNOOC gained as crude oil rose above $91 a barrel for the first time. Metal prices climbed the most in two weeks.
The Morgan Stanley Capital International Asia-Pacific Index rose 0.9% to 166.31 at 11:22 a.m. in Tokyo. An index of consumer discretionary stocks climbed 2.1%, the biggest gain among the 10 industry groups on the regional gauge, which is headed for a 0.3% gain for the week.
Japan's Nikkei 225 Stock Average advanced 0.6% to 16,383.88. South Korea's Kospi index climbed 1.4%, the biggest gain in the region, while Singapore's Straits Times Index rose 1.1%. Asian stock benchmarks rose in all markets open for trading except in New Zealand.
PN proposal may dampen mood
Markets had a strong session as bulls once again managed to dominate in the session. Despite a weak start healthy buying in Metal, Bank and Auto stocks lifted the benchmark Sensex to hit a high of 18,900 mark. However, profit booking was witnessed towards the fag end of the session dragging the markets from their respective highs.
Finally, the 30-share Sensex ended 257 points higher to close at 18,770. NSE Nifty closed 72 points higher to close at 5,568.
Sterlite Industries surged by over 6% to Rs937 after the government announced that they have set up panel on the company’s plan to acquire Balco stake. The company also announced that they were seeking to buy remainder of Balco from Indian government. The scrip touched an intra-day high of Rs942 and a low of Rs870 and recorded volumes of over 34,00,000 shares on NSE.
Hindustan Zinc ended flat at Rs830. The company announced that they have lowered lead prices by 2.8% to Rs1,60,400 per ton. The scrip touched an intra-day high of Rs850 and a low of Rs826 and recorded volumes of over 60,000 shares on NSE.
3i Infotech dropped 3% to Rs135. The company announced that they have hiked FY08 revenue guidance from Rs1150 to Rs1250 and have hiked their FY08 net profit guidance to Rs175cr from Rs165cr. The scrip touched an intra-day high of Rs143 and a low of Rs132 and recorded volumes of over 18,00,000 shares on NSE.
HDFC marginally slipped 0.6% to Rs2528. The company announced its plans to raise Rs5bn through sale of three year bonds having a coupon rate of 8.95%. The scrip touched an intra-day high of Rs2550 and a low of Rs2480 and recorded volumes of over 7,00,000 shares on NSE.
Wockhardt ended flat at Rs425 .The company announced that they have acquired US based specialty drugs company Morton Grove Pharmaceuticals for an undisclosed price. The scrip touched an intra-day high of Rs437 and a low of Rs428 and recorded volumes of over 1,00,000 shares on NSE.
Dabur Pharma slipped 1.1% to Rs63. The company yesterday announced that they have signed an agreement with Spanish generic company Combino Pharm to supply and distribute generic oncology products in the Spanish market. The scrip touched an intra-day high of Rs65 and a low of Rs63 and recorded volumes of over 87,000 shares on NSE.
Bharti Airtel advanced 2.2% to Rs1018 after 52 lakh shares of the company changed hands on NSE at Rs999.80 per share. The scrip touched an intra-day high of Rs1032 and a low of Rs980 and recorded volumes of over 1,00,00,000 shares on NSE.
Stocks in News:
- Bajaj Auto will lead the three-way global alliance with Renault-Nissan for the US$3,000 small car project.
- Reliance Retail launches its first wellness store in Hyderabad.
- Genpact beats Firstsource to bag Citigroups’ captive BPO operations.
- Goldman Sachs and Macquarie to buy 40% equity in PTC Financial Services, the investment arm of PTC India.
- Hindujas plan to sell 10% of its equity holding in Ennore Foundries.
- GMR Infra to bid for airport projects in East Europe.
- Wockhardt to launch Asia’s first recombinant human insulin- Wosulin in US and Europe.
- RPG group plans for a major restructuring and reorientation of operations with Rs150bn infusion.
- NTPC plans to acquire overseas coal mines to meet demand.
- GAIL plans to foray into gas pipeline construction business.
- Gujarat State Fertilizers and Chemicals has set a capex of Rs5bn.
- BEML has bagged Rs11.4bn contract from Delhi Metro Rail Corporation.
- Government set to ask companies to issue shares to foreign investors within a fixed period.
- DoT unlikely to allocate 1900MHz in 3G play to CDMA players in the near term.
- Government seeks 50% cut in bound rates on industrial goods.
- The Group of Ministers have finalized the proposed Rs7.3bn crop insurance scheme for tea, rubber, tobacco and spices.
- Planning Commission proposes to set up a National Electricity fund to enable generate resources for improving the power distribution network in the country.
- The Model Production Sharing Contract has incorporated the Empowered Group of Ministers (EGom) recommendation on gas pricing in its seventh round of the NELP.
Fund Activity:
FIIs were net sellers of Rs6.25bn (provisional) in the cash segment on Thursday and the local institutions bought shares worth Rs7.88bn.
In the F&O segment, foreign funds were net sellers at Rs1.29bn.
On Wednesday, FIIs pumped in Rs18.61bn in the cash segment. Mutual Funds were also net buyers of Rs3.39bn.
Major Bulk Deals:
Goldman Sachs has picked up Ahluwalia Contracts; DSP ML has bought Arvind Mills; UBS has purchased Balrampur Chini; ABN AMRO has sold Bombay Rayon; HSBC Financial has bought GTL Infra; Credit Suisse has picked up GVK Power; Deutsche Bank has sold JBF; Citigroup, ABN AMRO and Prudential Asset Management Singapore have purchased Maytas Infra; Deutsche Securities have picked up Mercator Lines; BNP Paribas has bought Mount Everest Mineral Water; Edelweiss has sold Spentex; Merrill Lynch has purchased Subex Azure.
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