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Tuesday, December 18, 2007
IFCI plunges
Shares of IFCI plunged over 10 per cent in morning trade, as the board could not reach a final decision on the induction of a strategic partner for which discussions continued for the second day on Tuesday.
The IFCI scrip fell to an intra-day low of Rs 97.40 down 10.14 per cent in the morning trade, as against yesterday's close of Rs 108.40 on the Bombay Stock Exchange.
Vedanta Group company Sterlite Industries, in association with Morgan Stanley, is the front-runner for picking up a 26 per cent stake in the financial institution.
A final decision on the bidder for the 26 per cent stake sale and the price of sale is expected to be finalised today at the board meeting which is continuing from yesterday.
The scrip was trading at Rs 104.40, down 3.69 per cent at the BSE, while a total of 2.26 crore shares had changed hands at the bourse in the afternoon trade.
The other bidders included consortia of Shinsei Bank Ltd of Japan, Punjab National Bank and JC Flowers and US-based Cargill Financial with Texas Pacific Group.
However, the consortium of W L Ross, GS Capital Partners VI Fund and Standard Chartered Bank opted out of the race to acquire a strategic stake in the country's oldest financial institution.
Market Close: Clouds of worries hover!
After yesterdays blood bath, jitters continue across the globle markets. US markets once again tumbled and hit two months low due to fears of recession which put brakes across the other markets. After a cautious start Indian indices traded extremely volatile for the day. It was a sea saw session; there was no clear direction for the indices were it was heading. Indices swing on both the sides and made inroads into negative region at the end. In mid trades indices bounced back from lows as heavy selling in index heavy weights continued and failed to sustain the higher levels. Looking at asian market except Hang Seng, most of the Asian markets ended in red while Europe continues to trade in green.
Sectors like Aviations, Refineries, and Pharma stocks attracted investors and managed to close in green. Selling was seen in Banking, Metals, Capital Goods and Realty stocks. Mid caps and Small caps also witnessed the selling pressure, which out performed the frontline stocks.
Sensex ended down by 182 points at 19079.641. Weighing on the Sensex are losses in HLL (211.2,-3 percent), L & T (3967.8,-3 percent), HDFC (2812.3,-2 percent), ICICI Bk (1140.65,-2 percent) and RIL (2728.8501,-2 percent). Losses are restricted by gains in Cipla (215.75,+4 percent), ITC (197.85,+2 percent), NTPC (232.4,+2 percent), Ranbaxy (410,+1 percent) and Maruti (1019.65,+1 percent).
ABG Shipyard bagged repeat order of Rs 1000 cr from international client. This enhances the earnings visibility for the company but also reaffirms its execution capabilities. The new project would take ABG's order book to Rs 8,277 cr, about 12 times the company's revenues for FY07. Further, the orders include five 54,000 Dead weight tonnage (DWT) bulk carrier vessels. ABG Shipyard has 12 such orders for a limited number of customers. Similar specification for small bulk carrier vessels (32,000-54,000 DWT) is likely to result in economies of scale thereby strengthening profit margins. The Surat facility expansion, expected commissioning of new facility in Dahej by April 2008 and the acquisition of Vipul Shipyard are all expected to bolster the company?s ability to execute orders. ABG has plans to raise about Rs 800 cr through private placement. The funds would be used for expansion of its existing shipyard at Surat and new shipyard on the sea front, which will be capable of building very large sized and all types of vessels. Valuation seems to be expensive at the current market price of Rs 907 the stock trades at 36 times of trailing earnings. The business scenario is extremely good, but the risk to the business is subsidy. If Government discontinues the subsidy Indian players won?t be able to compete in global scenario. Still there is no clarity about this, weather the Govt will continue or may bring down.
Housing Development and Infrastructure (HDIL) has planed to enter the entertainment sector under the brand name Broadway. HDIL will invest close to Rs 1000 cr to fund its organic as well as inorganic expansion in the country's multiplex market. HDIL's new venture will offer films through its multiplexes and will have a range of gaming centres with food court that will be managed by Broadway. HDIL will set up its first Broadway theatre in Vasai, Mumbai suburb. This will be followed with the opening of the Broadway entertainment centre at Kandivli somewhere around mid-January next year. The multiplex will have four screens by the end of the current fiscal. The company plans to set up over 150 theatres in major cities by the end of the fiscal 2009. HDIL entertainment is scouting for acquisition in the theatre chain business and talks are on with various firms in the industry. The business seems to be good but there are many players in multiplex business, unfortunately it leads to competition. All the players are expanding the capacity the key to the business is location, where it is situated. The Company has a great advantage that the cinema halls will be owned and which will reduce the rental cost which has hit big players in this business. But Entering a new business is not a venture to be entered in. The stock closed down by 1.34%.
Technically Speaking: It was an extremely volatile session, Sensex traded in negative bias with no clear direction and ended in red. Sensex touched intraday high of 19,375 and low of 19,009. Overall breadth was in favor of Declines, where the Advances stood at 1236, while Declines at 1631. The turnover was pretty good at Rs 8007 cr. Sensex is finding buying support near 19,005 levels but traders should remain cautious as we expect it could go up to 19,500 only as a pullback rally and look to exit longs on pullback. Sensex support lies at 19,005 and 18,860 levels. The Resistance lies at 19,300 and 19,620.
Post Market Commentary
The market closed on a negative note after facing a lot of volatility and keeps on moving in the positive and negative region through out the trading session. Though the market lost the momentum after the opening on the back of heavy selling across the counters but buying at the lower levels led the market to recover but unable to hold its gains at higher levels and closed lower. Most selling is seen from the Metals, Capital Goods and banking baskets. Both the BSE Mid cap and Small cap closed with a marginal loss of 11.74 points and 21.90 points at 9,093.84 and 11,818.12 respectively. The BSE Sensex closed lower by 181.71 points at 19,079.64 and NSE Nifty slipped by 34.7 points to close at 5,742.30. Overall, the market breadth was week as 1,672 stocks are closed in red while 1225 stocks are closed in green.
BSE Health Care index grew by 63.12 points to close at 4,261.32. Scrips that gained are Nicholas Piramal (7.29%), Sun Pharma (4.03%), Cipla (3.78%), Glenmark (1.54%) and Ranbaxy (1.05%).
BSE Metal index closed lower by 246.87 points at 18,077.63. Scrips that fell are Jindal Steel (6.11%), Sesa Goa (3.53%), Maharash Sea (2.35%), Bhushan steel (2.22%), Sterlite Inds (1.76%)
BSE Capital Goods fell by 226.43 points to close at 18,902.71. Pushed down by BEML (2.87%), L&T (2.80%), Kalpataru (2.50%), BHEL (1.24%), Lakshmi Machines (1.71%) .
BSE Realty index closed down by 44.78 points at 11,654.58 as Ansal Infra (3.05%), Akruti City (2.34%), Unitech (2.11%), Mahindralife (1.53%) closed lower.
BSE Oil & Gas index declined marginally by 5.04 points to close at 12,309.68. Scrips that fell are Reliance (1.75%) and ONGC (1.41%) while Essar Oil (9.90%), BPCL (5.29%), Indian Oil (4%) .
BSE Bankex index dropped by 155 points to close at 10,764.22. Pulled it down are Canara Bank (3.56%), AXIX Bank (2.65%), ICICI Bank (2.27%), PNB (1.74%) and Kotak Bank (1.54%).
Post Market Commentary
The market closed on a negative note after facing a lot of volatility and keeps on moving in the positive and negative region through out the trading session. Though the market lost the momentum after the opening on the back of heavy selling across the counters but buying at the lower levels led the market to recover but unable to hold its gains at higher levels and closed lower. Most selling is seen from the Metals, Capital Goods and banking baskets. Both the BSE Mid cap and Small cap closed with a marginal loss of 11.74 points and 21.90 points at 9,093.84 and 11,818.12 respectively. The BSE Sensex closed lower by 181.71 points at 19,079.64 and NSE Nifty slipped by 34.7 points to close at 5,742.30. Overall, the market breadth was week as 1,672 stocks are closed in red while 1225 stocks are closed in green.
BSE Health Care index grew by 63.12 points to close at 4,261.32. Scrips that gained are Nicholas Piramal (7.29%), Sun Pharma (4.03%), Cipla (3.78%), Glenmark (1.54%) and Ranbaxy (1.05%).
BSE Metal index closed lower by 246.87 points at 18,077.63. Scrips that fell are Jindal Steel (6.11%), Sesa Goa (3.53%), Maharash Sea (2.35%), Bhushan steel (2.22%), Sterlite Inds (1.76%)
BSE Capital Goods fell by 226.43 points to close at 18,902.71. Pushed down by BEML (2.87%), L&T (2.80%), Kalpataru (2.50%), BHEL (1.24%), Lakshmi Machines (1.71%) .
BSE Realty index closed down by 44.78 points at 11,654.58 as Ansal Infra (3.05%), Akruti City (2.34%), Unitech (2.11%), Mahindralife (1.53%) closed lower.
BSE Oil & Gas index declined marginally by 5.04 points to close at 12,309.68. Scrips that fell are Reliance (1.75%) and ONGC (1.41%) while Essar Oil (9.90%), BPCL (5.29%), Indian Oil (4%) .
BSE Bankex index dropped by 155 points to close at 10,764.22. Pulled it down are Canara Bank (3.56%), AXIX Bank (2.65%), ICICI Bank (2.27%), PNB (1.74%) and Kotak Bank (1.54%).
Sensex drops 182 points amid sharp volatility
Nervousness among investors to take fresh positions was visible through the entire trading session, as traders booked profits on every rise. The market opened with a negative gap of 78 points tracking mixed global cues, but recovered quickly on strong buying in index pivotal stocks to touch the day's high of 19,375. The market thereafter witnessed choppy trading. After exhibiting a range-bound trend with a mixed bias, profit booking in banking, capital goods, and metal stocks saw the Sensex slump below the 19,100 mark by afternoon. The Sensex managed to erase some losses towards the close but a fresh bout of selling saw it touch the day's low 19,009 and end the session with a loss of 182 points at 19,080. Broad-based Nifty closed the session at 5,742, down 35 points.
Market breadth was weak. Of 2,930 stocks traded on the Bombay Stock Exchange (BSE), 1,672 stocks declined, 1,225 stocks advanced and 33 stocks ended unchanged. Most sectoral indices ended weak. BSE bankex index slipped by 142% followed by BSE Metal index (down 1.35%) and BSE CG index (down 1.18%) while, BSE HC index gained 1.50%, BSE CD index added 1.12% and BSE PSU index was up 0.39%.
Among major losers, HLL slipped 3.39% at Rs211, L&T tumbled by 2.80% at Rs3,968, ICICI Bank declined by 2.27% at Rs1,141, HDFC plunged by 2.27% at Rs2,812, Reliance Industries dropped 1.75% at Rs2,729, ONGC crumbled by 1.41% at Rs1,150, HDFC Bank slumped 1.28% at Rs1,657 and BHEL fell by 1.24% at Rs2,395. However, Cipla gained 3.78% at Rs216, ITC surged 2.22% at Rs198, NTPC added 1.66% at Rs232 and Ranbaxy moved up by 1.05% at Rs410 while Maruti Suzuki, Bharti Airtel, ACC, DLF, Tata Motors and TCS ended with modest gains.
Over 3.77 crore IKF Technologies shares changed hands on BSE followed by IFCI (3.57 crore shares), Ispat Industries (3.31 crore shares), GV Films (2.65 crore shares) and Himachal Futuristic Communication (2.29 crore shares).
Valuewise, ONGC clocked a turnover of Rs387 crore on BSE followed by IFCI (Rs364 crore), Essar Oil (Rs292 crore), Ispat Industries (Rs259 crore) and Reliance Petroleum (Rs227 crore).
Sensex sheds 182 points
The market declined sharply in the late trade before recovering from lower level in what was a choppy trading session today. Though the market breadth was still negative, it improved substantially compared to a weak breadth in mid-morning trade. FMCG, healthcare and consumer durable stocks gained. Banking, metal and capital goods stocks edged lower. Reliance Industries declined.
European markets which opened after Indian market were in green. Asian markets, which opened before Indian markets were mixed today, 18 December 2007. US stocks tumbled on Monday, 17 December 2007, on concerns about the US economy, amid signs of rising inflation and weakness in holiday shopping.
The 30-share BSE Sensex declined 181.71 points or 0.94% to 19,079.64. It had hit a low of 19,009.35 in late trade. At day’s low Sensex lost 252 points. It hit a high of 19,375.07 in early trade. At its day’s high Sensex had gained 113.72 points.
The S&P CNX Nifty declined 34.7 points or 0.6% to 5,742.30.
Market breadth was negative. On BSE, 1,193 stocks advanced, 1,672 stocks declined and 27 stocks remained unchanged. 18 out of 30 stocks from the Sensex pack declined.
BSE clocked a turnover of Rs 8007 crore, lower than Monday (17 December 2007)'s Rs 9641 crore.
Nifty December 2007 futures were at 5788, at a premium of 45.70 points as compared to the spot closing of 5742.30.
The NSE's futures & options (F&O) segment turnover was Rs 74,579.26 crore, which was higher than Rs 73,373.37 crore on Monday, 17 December 2007.
BSE Mid-Cap index declined 0.13% to 9,093.84. BSE Small-Cap index declined 0.18% to 11,818.12. Both these indices outperformed Sensex.
BSE Realty index (down 0.38% to 11,654.58), BSE Power index (down 0.17% to 4,215.30), BSE Auto index (down 0.08% to 5,564.87), BSE FMCG index (down 0.05% to 2,210.01), BSE Oil & Gas index (down 0.04% to 12,309.68), BSE Consumer Durables index (up 1.12% to 6,059.99), BSE Health Care index (up 1.5% to 4,261.32) outperformed Sensex.
BSE Capital Goods index (down 1.18% to 18,902.71), BSE Metal index (down 1.35% to 18,077.63) and BSE Bankex (down 1.42% to 10,764.22) underperformed Sensex.
India’s largest private sector firm by market capitalization & oil refiner Reliance Industries declined 1.75% to Rs 2,728.85. As per reports, Reliance Industries (RIL) has paid advance tax of Rs 1045 crore in the third quarter ended 15 December 2007 compared to Rs 440 crore in the corresponding quarter of the previous year.
Reliance Communications (RCom) was down 0.47% to Rs 714.40. As per reports it will invest Rs 800 crore to roll out a telecom network — fixed and mobile — in Uganda, a country in Eastern Africa. The company has bagged a licence to be the African nation’s sixth telecom operator. The company plans to launch services in Uganda by Q3 in 2008, the report added.
FMCG majors rose. ITC (up 2.22% to Rs 197.85) and Tata Tea (up 1.28% to Rs 880.60) edged higher. Hindustan Unilever (down 3.39% to 211.20) edged lower.
Consumer durables stocks rose. Videocon industries (up 0.53% to Rs 619.40), Lloyd Electric (up 1.19% to Rs 174) and Titan Industries (up 4.99% to Rs 1,459.65) edged higher.
Healthcare stocks rose. Sun Pharmaceuticals (up 4.03% to Rs 1,137.95), Cipla (up 3.78% to Rs 215.75), Dr. Reddy’s Laboratories (up 0.09% to Rs 717.45), Ranbaxy Laboratories (up 1.05% to Rs 410), edged higher.
Metal stocks declined. Tata Steel (down 0.91% to Rs 816.35),Sterlite Industries (down 1.76% to Rs 959), and Hindalco Industries (down 0.47% to Rs 199.70) edged lower. Steel Authority of India was flat at Rs 259.75.
Capital goods stocks declined. Bharat Heavy Electricals (down 1.24% to Rs 2,395.10) and Larsen & Toubro (down 2.8% to Rs 3,967.80) edged lower. Suzlon Energy (up 1.84% to Rs 1,861.80) edged higher.
Banking stocks declined. ICICI Bank (down 2.27% to Rs 1,140.65), and HDFC Bank (down 1.28% to Rs 1,685) edged lower.
State Bank of India declined 0.47% to Rs 2,303.70. State Bank of India (SBI) shelled out Rs 1090 crore, up 26.7% over the tax it paid in the corresponding period in the previous year.
Maruti Suzuki India (up 0.93% to Rs 1,019.65) and NTPC (up 1.66% to Rs 232.40) edged higher.
India’s largest dedicated housing financing firm by operating income HDFC declined 2.27% to Rs 2,812.30.
IKF Technologies clocked the highest volume of 3.77 crore shares on BSE. The stock rose 5.17% to Rs 13.03. IFCI clocked the second highest volume of 3.57 crore shares on BSE. The stock declined 6.73% to Rs 101.10. Ispat Industries clocked the third highest volume of 3.31 crore shares. The stock rose 4.43% to Rs 81.35. G V Films clocked the fourth highest volume of 2.65 crore. The scrip declined 3.24% to Rs 10.76. Himachal Futuristic Communications declined 0.12% to Rs 41 and it clocked the fifth highest volume of 2.29 crore shares.
ONGC clocked the highest turnover of Rs 387.94 crore on BSE. IFCI (Rs 364.74), Essar Oil (Rs 293.96 crore), Ispat Industries (Rs 259.98 crore) and Reliance Petroleum (Rs 227.16 crore) were other turnover toppers in that order.
European markets were trading higher today. Germany’s DAX (up 0.83% to 7,891.17) and UK’s FTSE 100 (up 0.77% to 6,326) edged higher.
Asian markets were mixed today, 18 December 2007. Hong Kong's Hang Seng (up 0.51% at 26,732.87), South Korea's Seoul Composite (up 1.18% at 1,861.45), Singapore's Straits Times (up 0.47% at 3,369.31) edged higher. Taiwan's Taiwan Weighted (down 0.3% at 7,807.39), Shanghai Composite (down 0.83% to 4,836.17) and Japan's Nikkei (down 0.27% to 15,207.86) declined.
The Dow Jones industrial average slid 172.65 points, or 1.29%, to end at 13,167.20, on Monday, 17 December 2007. The Standard & Poor's 500 Index dropped 22.05 points, or 1.50%, to 1,445.90. The Nasdaq Composite Index tumbled 61.28 points, or 2.32%, to 2,574.46.
US government reports last week showed rising price pressures in November 2007, while concerns about the housing slump intensified after news that sentiment among US home builders held at a record low for a third consecutive month in December 2007.
Volatility may remain high in the near term ahead of expiry of December 2007 derivatives contracts next Thursday, 27 December 2007. The market remains closed on Friday, 21 December 2007 on account of Bakri Id and also on Tuesday, 25 December 2007 on account of Christmas. Therefore, only six trading sessions are left for expiry of December 2007 derivatives contracts.
Meanwhile, the market regulator Securities and Exchange Board of India (Sebi) on Monday, 17 December 2007, put out a note on the proposed plan to introduce new products in the derivatives segment on its website to seek comments/suggestions from market participants on or before 21 December, 2007.
Recession fears hit US Market
Dow slumps more than 550 points in last five sessions
US Market started the new week on a much weaker note dragging last week’s losses further and all the indices lost more than 1% today, Monday, 17 December, 2007. Concerns over economic growth were the main reason for this slide. All ten sectors ended higher lower today led by materials, technology and energy sectors.
Financials also continued to be under pressure after Citigroup downgraded a number of banks. A downgrade on Caterpillar by Morgan Stanley weighed heavily on the materials sector. Crude prices slipped for the third consecutive day.
The Dow Jones industrial Average ended the day with a loss of 172.65 points at 13,167.2. The Nasdaq Composite Index, finished lower by 61.28 points at 2,574.46. S&P 500 finished lower by 22.05 points at 1,445.9.
Twenty-seven out of thirty Dow stocks ended in red today. Alcoa, Caterpillar and Home-Depot were the main Dow laggards. The only three Dow winners were Wal-mart, Citigroup and Honeywell.
Other than Caterpillar, there were other headliners in the materials sector. Ingersoll-Rand announced that it is going to acquire air conditioning system maker Trane for approximately $10.2 billion.
Citigroup downgraded multiple banking stocks that included Bank of America, JPMorgan Chase and US Bancorp.
Before the market opened, regional manufacturing report reported that the New York Empire State Index stood at 10.3 for November. While a number above zero reflects growth, the reading was well below the prior month's reading of 27.7 and the consensus estimate of 20. The weaker than expected regional manufacturing report provided a lift for the Treasury market.
Technology shares the most hit on recession fears
IBM, Apple, RIMM and Google were the most hit technology shares. Shares slipped on anticipation that the economy might be heading towards a recession that might hit the economy early 2008.
All Indian ADRs ended in the red today. VSNL, HDFC Bank and ICICI Bank were the topmost three losers giving up 10.4%, 8.4% and 7.9% respectively.
Crude prices slipped today as traders speculated that demand is likely to slow down due to economic growth concerns. Comments from Organization of Petroleum Exporting Countries (OPEC) official regarding increasing production in next meeting also led to crude prices slipping. This was the third consecutive drop in crude prices. Crude-oil futures for light sweet crude for January delivery closed at $90.63/barrel (lower by $0.64/barrel or 0.7%) on the New York Mercantile Exchange.
As per the Algerian Oil Minister, Chakib Khelil, OPEC may decide to increase quotas when it meets 1 February, 2008. He is expected to take over as President of OPEC on 1 January, 208.
Volume on the New York Stock Exchange topped 1.4 billion shares, and decliners outnumbered advancers by more than 5 to 1. On the Nasdaq, more than 1.9 billion shares changed hands, and decliners topped advancing stocks, also by more than 4 to 1.
Tomorrow, investors will focus on economic reports to set the tone of trading. November's housing starts is due before the market opens. The data will measure how much residential building actually commenced during the past month.
Market may recover
Figures showing surge in advance tax payments for the third installment for the quarter ended 15 December 2007 by top corporates may help the market recover from Monday’s steep fall. As per reports, Reliance Industries (RIL) has paid advance tax of Rs 1045 crore in the third quarter ended 15 December 2007 compared to Rs 440 crore in the corresponding quarter of the previous year. State Bank of India (SBI) shelled out Rs 1090 crore, up 26.7% over the tax it paid in the corresponding period in the previous year.
Volatility may remain high in the near term ahead of expiry of December 2007 derivatives contracts next Thursday, 27 December 2007. The market remains closed on Friday, 21 December 2007 on account of Bakri Id and also on Tuesday, 25 December 2007 on account of Christmas. Therefore, only six trading sessions are left for expiry of December 2007 derivatives contracts.
Asian stocks were in green on Tuesday, 18 December 2007. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore and Taiwan were up by between 0.14% to 1.1%.
US stocks tumbled on Monday, 17 December 2007, on concerns about the US economy, amid signs of rising inflation and weakness in holiday shopping. The Dow Jones industrial average slid 172.65 points, or 1.29%, to end at 13,167.20. The Standard & Poor's 500 Index dropped 22.05 points, or 1.50%, to 1,445.90. The Nasdaq Composite Index tumbled 61.28 points, or 2.32%, to 2,574.46.
US government reports last week showed rising price pressures in November 2007, while concerns about the housing slump intensified after news that sentiment among US home builders held at a record low for a third consecutive month in December 2007.
As per provisional data, FIIs sold shares worth a net Rs 2151.21 crore on Monday, 17 December 2007. Domestic funds bought shares worth a net Rs 226.86 on that day.
FIIs were net sellers to the tune of Rs 2,196.83 crore in the futures & options segment on Monday, 17 December 2007. According to data released by the NSE, FIIs were net sellers of index futures to the tune of Rs 2,042.39 crore and bought index options worth Rs 355.82 crore. They were net sellers of stock futures to the tune of Rs 509.24 crore and sold stock options worth Rs 1.01 crore on that day.
The 30-share BSE Sensex slumped 769.48 points or 3.84% to 19,261.35 on Monday, 17 December 2007, tracking weak global equities.
Morning Call
Market Grape Wine :
In House :
Nifty at a supp of5687 and 5610 and resis at 5810 and 5855
Medium term outlook to saty positive till Nifty stays above 5610
Mkt to open on a negative note with buying supp likely to emerge at lower levels
Advance tax figures have been good for SBIN(1090cr vs 865cr), Reliance(1000cr vs 444cr) and ICICIBank(500cr vs 250cr)
Intra Day: Buy Dr reddy above 728 with a TGT of 745 and a SL of 719
Sell Indiacement below 290 with a TGT of 278 and a SL of 290
F&O: Sell Bankindia below 357 with a TGT of 343 and a SL of 364
Sell PFC below 250 with a TGT of 236 and a SL of 256
Out House :
Markets at a support of 18786 & 19019 levels with resistance at 19565 & 19786 levels .
Buy : RIL & REL at dips
Buy : INOX at dips
Buy : JpAsso & Jphydro at dips
Buy : Centextile & Neyvelli at dips
Buy : SKumar & ABAN at dips
Buy : IBUllsreal at dips
Buy : JindalPower at dips
Buy : Kotak & SBIN at dips
Buy : IOlBroad at dips
Dark Horse : Aban , Jpasso , IOL Broad , IBullReal , INOX , Essaroil , RIL , SBIN & JpHydro
Bullet for the Day : RIL & SBIN with strict stop loss .
Market may remain positive
The current market sentiment is mainly driven by the movement in global indices. The mood of the market is expected to remain positive after robust advance tax payments from the leading companies and also help the market to advance further. However, after yesterday's biggest fall, the investors are advised to remain cautious as the market may turn volatile on account of profit bookings on higher levels in later part of the day. Among the indices, the Nifty could test higher levels around 6,000 while on the downside the index has a strong support at 5600. The Sensex has a likely support at 18,600 and may face resistance at 19,830.
US indices tanked on Monday as investors continued to worry about the economic outlook amid rising inflationary pressures. While the Dow Jones fell by 173 points at 13167, the Nasdaq slipped 61 points to close at 2574.
Crude oil prices in the global market eased further, with the Nymex light crude oil for January series slipped by 64 cents at $90.63 a barrel. In the commodity space, the Comex gold for February delivery moved up by $1.30 to settle at $798 a troy ounce.
Grey Market - Precision, Aries, Porwal, Manaksia
eClerx Services 270 to 315 30 to 35
BGR Energy 425 to 480 390 to 400
Transformers & Rectifiers 425 to 465 330 to 340
Brigade Enterprises 351 to 390 20 to 25
Jyothy Lab. 690 170 to 175
Burnpur Cement Ltd. 12 4 to 6
Aries Agro 120 to 130 18 to 20
Manaksia Ltd. 140 to 160 35 to 40
Porwal Autocomponents 68 to 75 12 to 15
Precision Pipes & Profiles 140 to 150 30 to 35
Daily Technical Analysis
Nifty — The index opened on a negative note and witnessed a sharp decline. It ended the day with a loss of 271 points.
50-day moving average — The index has closed around the 50 dma at 5728; a break below the 50 dma around 5728 can see intra-day weakness, and the index can decline toward 5692-5612. On the upside intra-day resistance is around 5830; sustaining above the 5830 level can see intra-day pullback. Higher resistance is around 5898.
Conclusion — Trade a breakout from the 5728-5830 band; expect intra-day
weakness below 5728.
Glaxo Pharma
We recommend a buy in GlaxoSmithKline Pharmaceuticals. It is clearly evident from the weekly chart of GlaxoSmithKline Pharmaceuticals that it had been on an intermediate-term downtrend from June high of Rs 1,340 to November low of Rs 935. However, the stock found support at historically significant support level of Rs 950 in early December. From this support level, the stock began to move up. We note that the stock has recently penetrated the intermediate-term down trendli ne and the 50-day moving average line (which was constantly providing resistance in the past). The weekly momentum indicator has recovered from the oversold region and the daily momentum indicator is likely to enter the bullish zone. The immediate-support for the stock is at Rs 1,010 and the next support is at Rs 950. Our short-term forecast for the stock is bullish and we expect it to move up to Rs 1,188. Short-term investors can buy the stock with a stop-loss at Rs 1,000.
Via Businessline
Pre Market Watch
The market is likely to have negative opening on the back of weak global cues. Yesterday, the Indian markets declined drastically by more than 850 points during the trading session on the back of heavy selling pressures across the counters. The cues from the global markets are not in favor, which led the domestic market to trade on the back foot. On Monday, the BSE Sensex closed lower by 769.48 points at 19,261.35 and NSE Nifty fell by 270.7 points to close at 5,777. We expect the market to extend yesterday''s losses today during the trading session.
On Monday, the US market closed in red. The DJIA declined by 172.65 points to close at 13,167.20 along with Nasdaq by 61.28 points to close at 2,574.46 and S&P 500 index by 22.05 points to close at 1,445.90.
Indian ADRs ended in negative territory. In technology sector, Satyam slipped by (5.62%) along with Patni Computers by (3.77%), infosys by (3.69%) and Wipro by (3.45%). In banking sector, HDFC bank and ICICI bank dropped (8.41%) and (7.94%) respectively. In telecommunication sector, VSNL and MTNL dropped by (10.42%) and (6.32%) respectively.
The major stock markets in Asia are trading mixed. Hang Seng is trading lower by 250.37 points at 26,346.21. Japan''s Nikkei is trading down by 117.31 points to close at 15,132.48. Taiwan weighted is trading at 7,799.58 down by 31.27 points. While Singapore Strait times is trading up by 6.34 points at 3,359.90 along with South Korea''s Seoul Composite is trading higher by 7.08 points at 1,846.90.
The FIIs on Monday stood as the net buyer both in equity and debt. The gross equity purchased was Rs4,732.60 Crore and the gross debt purchased was Rs445.90 Crore while the gross equity sold stood at Rs4,325.10 Crore and gross debt sold stood at Rs0.00Crore. Therefore, the net investment of equity reported was Rs407.50 Crore and net debt was Rs445.90Crore.
Today, Nifty has support at 5,612 and resistance at 5,809 and BSE Sensex has support at 18,863 and resistance at 19,329.
Trading Calls
Nifty (5777) Sup 5678 Res 5876
Buy Bharti Airtel (905) SL 897 Target 920, 925
Buy SRF (183) SL 178
Target 192, 194
Buy Wockhardt (415) SL 410 Target 423, 426
Sell Rajesh Exports (910) SL 918 Target 892, 889
Sell GTL (255) SL 260
Target 245, 242
Dire Straits…sultans of swing set in
The same old fears and the same old crimes, we haven't changed since ancient times. - Dire Straits, Iron Hand
Bears rocked the street on Monday as bulls were taken aback by the sudden and sharp reversal in their fortunes. (We are sure you all saw it coming!) Weak global markets, talk of expensive valuations, indifferent trend in FII flows and lack of major local catalysts exacerbated the fall. According to the provisional figures, foreign funds were big-time sellers in both, the cash as well as F&O segments. Market breadth was negative, with even the small-cap and mid-cap shares tumbling like nine pins. Traded volume spiked up, which is even worse on a bad day. In short, it was a Bear Maul. So can the bulls bounce back and resume their buying spree?
With the US shares tumbling overnight and markets across the world falling in line, one may be tempted to say that the bears will have an upper hand today as well. And, with the FIIs selling heavily the bulls will have their task cut out. However, there is a silver lining in the dark clouds. Markets across Asia, led by the Hang Seng in Hong Kong, have rebounded from a weak start. We expect a similar trend to play out in our market as well, with a slightly lower beginning and a bounce back later. The near-term outlook is still as hazy as the weather in most parts of North India. There is no getting away from the intra-day swings as bulls and bears will keep asking each other, Where do you think you’re going?
Marg Constructions says its 100% subsidiary is establishing a Multi Service SEZ at Seekinakuppam in Tamil Nadu. This is adjacent and contiguous to the Light Engineering SEZ which has already been notified by the Government.
Shiv Vani Oil & Gas Exploration Services has bagged contracts from Oil India for charter hire of 4 (four) rigs of 1500 HP / 2000 HP for a period of two years at various locations. The contract value is Rs2.6bn.
Macmillan India has now completed the acquisition of 80% stake in Frank Brothers & Co. (Publishers) Ltd., with an option to acquire the balance shareholding by March 31, 2009 at a mutually agreed valuation. This acquisition will enable the company to gain a leadership position in educational publishing in India.
US stocks slumped on Monday, as investors remained on the sidelines amid persistent worries about the state of the US economy. Technology shares were the hardest hit, as concerns over economic growth overshadowed a fresh spate of M&A deals.
Exxon Mobil and Freeport-McMoRan Copper declined on slumping fuel and metals prices. Micron Technology fell the most in 11 weeks after an analyst forecast a wider loss. Caterpillar slid to the lowest since Nov. 27 after Morgan Stanley said construction-equipment sales will slow next year.
The Dow Jones Industrial Average sank 173 points, or 1.3%, to 13,167.2, marking its first back-to-back drops of more than 100 points since Aug. 15. The Standard & Poor's 500 Index slipped 22 points, or 1.5%, to 1,445.9. The Nasdaq Composite Index lost 61 points, or 2.3%, to 2,574.46.
Market breadth was negative. Five stocks dropped for every one that rose on the New York Stock Exchange. Benchmark indexes in Asia and Europe retreated.
The Fed offered $20bn in 28-day credit through an auction. The series of auctions are part of the central bank's ongoing efforts to ease tension in the credit markets. Last week, the Fed also cut interest rates for the third time in a row since September in a bid to boost liquidity and stave off the risks of a recession.
But investors are worried that the Fed may have to stop cutting rates, particularly if inflationary pressures keep rising. Former Fed Chairman Alan Greenspan said over the weekend that the US economy is at a risk of stagflation - an environment of rising prices and slowing growth.
Monday's economic news was mixed on Wall Street. The New York Empire State index fell to 10.3 in December from 27.4 in November, a steeper-than-expected decline in the regional manufacturing read. The third-quarter current-account deficit narrowed more than expected. Homebuilder sentiment in December remained at a record low for the third straight month.
Ingersoll-Rand said it will buy Trane for $10.1bn, to create one of the largest air conditioner manufacturers in the world. Ingersoll-Rand shares fell 11%, while Trane shares jumped nearly 22%.
Aon said it will sell two insurance units for $2.75bn in separate all-cash deals. Aon shares gained 1%. Loews said its board has approved a spinoff of cigarette marker Lorillard. Loews shares gained over 2%.
National Oilwell Varco said it will buy oil drilling gear maker Grant Prideco for $7.37bn in cash and stock. National Oilwell shares fell 8.6% and Grant Prideco shares rose 13.6%.
Treasury prices rose as investors sought safety in government debt, lowering the yield on the 10-year note to 4.14% from 4.24% late on Thursday. In currency trading, the dollar gained versus the euro and slipped against the yen.
US light crude oil for January delivery fell 64 cents to settle at $90.63 a barrel on the New York Mercantile Exchange. COMEX gold for February delivery rose $1.30 to settle at $799.30 an ounce.
European shares ended sharply lower. The pan-European Dow Jones Stoxx 600 index declined 1.8% to 380.83. Germany's DAX 30 dropped 1.5% to 7,825.44, while the French CAC-40 lost 1.6% to 5,514.88 and the UK's FTSE 100 fell 1.9% to 6,277.80.
In the emerging markets, the Bovespa in Brazil tumbled 4.2% while the IPC index in Mexico plummeted 3.4% to 28,968. The RTS index in Russia was down 0.8% at 2251 and the ISE National-30 index in Turkey slipped 2.5% to 68,204.
A few key Asian markets recovered smartly from a weak start. The Hang Seng is now up 94 points at 26,690 after being as low as 26,093. It had opened at 26,515 against the last close of 26,596. The Nikkei was down 117 points at 15,132, while the Kospi in Seoul was up 5 points at 1845.
The MSCI Asia Pacific Index was down 0.6% at 151.43 as of 10:14 a.m. in Tokyo, adding to a four-day, 7.9% drop and set for its lowest close since Sept. 18.
Separately, reports say that the Bank of Japan is likely to keep its benchmark interest rates unchanged this week due to weak economic conditions, low business sentiment and slowdown in the US economy. Governor Toshihiko Fukui and his colleagues will leave the benchmark overnight lending rate at 0.5% on Dec. 20.
Technical bounce back likely
Benchmark Sensex fell by over 4% posting its second biggest single day point fall and Nifty index registered its biggest single day point fall. Following a fall in overseas markets, key indices extended its losing streak to the third straight trading session as it was a day of heavy selling across the sectors with Metal, Realty and Oil & gas stocks being among the major losers.
Finally, the 30-share Sensex fell 769 points to close at 19,261 and the Nifty index dipped nearly 5% to close at 5,777.
Cummins India edged lower 0.3% to Rs404. Reports stated that the company would source US$2bn worth of auto components from domestic vendors by 2009-10, double the current years’ target. The scrip touched an intra-day high of Rs416 and a low of Rs404 and recorded volumes of over 3,00,000 shares on NSE.
Power Grid dropped 6% to Rs137. According to reports the company secured government approval to procure US$1.6bn loan from World Bank and Asian Development Bank. The scrip touched an intra-day high of Rs147 and a low of Rs135 and recorded volumes of over 1,00,00,000 shares on NSE.
NTPC lost over 7% to Rs228. According to reports the company planned to set up imported coal based power projects on the country’s coast. The scrip touched an intra-day high of Rs246 and a low of Rs225 and recorded volumes of over 75,00,000 shares on NSE.
L&T declined 2.3% to Rs4078. Reports stated that the company shortlisted three locations for its next shipyards for which the company will invest Rs20bn. The scrip touched an intra-day high of Rs4246 and a low of Rs4050 and recorded volumes of over 7,00,000 shares on NSE.
Petron Engineering surged by over 6.5% to Rs401 after the company announced that it secured orders worth Rs988.7mn. The scrip touched an intra-day high of Rs414 and a low of Rs375 and recorded volumes of over 26,000 shares on NSE.
Networth was up 2% to Rs187 after the company declared that it sold Rs498mn stake to investors. The scrip touched an intra-day high of Rs192.65 and a low of Rs183 and recorded volumes of over 83,000 shares on NSE.
ABG Shipyard surged by over 5% to Rs893. The company announced that it secured orders worth Rs10bn. The scrip touched an intra-day high of Rs985 and a low of Rs950 and recorded volumes of over 1,00,000 shares on NSE.
What the FIIs are doing
FIIs were net sellers of Rs21.5bn (provisional) in the cash segment on Monday while the local institutions pumped in Rs2.27bn. In the F&O segment, foreign funds were net sellers of Rs22.06bn on the same day.
On Friday, FIIs were net buyers of Rs4.07bn in the cash segment. Mutual Funds were net sellers of Rs2.19bn on the same day.
Stocks in News:
Reliance Industries and GAIL India have identified 10 countries to set up a multi billion dollar petrochemical plant. (ET)
ONGC is likely to face delay in production from KG basin as DGH requires more time for appraisal and conceptual development plan. (BL)
Reliance Communication is investing Rs8bn to toll out a telecom network – fixed and mobile – in Uganda. (ET)
Pfizer is developing 240 potential drugs, including those in the pre-clinical stage and new indications, for existing drugs. (BS)
Aurobindo Pharma plans to invest US$100mn in phases to enhance European presence and expects sales in South Africa to touch US$3mn in FY08. (BS)
L&T eyes US$5bn order from air force’s combat aircraft deal. (Mint)
Lanco Infratech plans to bid for various power projects totaling 10,000 MW. The company plans to hold at least 51% in all the projects. (DNA)
Videocon Industries has renewed its bid for Korean firm Daewoo Electronics. The company plans to demerge its power, energy business. (BS)
Indiabulls Financial Services is likely to announce a joint venture with a global insurance player. (BS)
A consortium of Sterlite Industries and Morgan Stanley has emerged as the front runner to acquire a 26% stake in IFCI. (ET)
UB Board is likely to consider a merger between Kingfisher Airlines and Deccan Aviation on recommendation of Accenture. (ET)
HDIL has plans to invest Rs10bn in setting up 150 theaters by FY09. (ET)
Suzlon Energy is in the process of acquiring land in Surendranagar and Rajkot districts for wind farm development. (ET)
Citi Venture Capital Fund and India Equity partners have picked up 15% stake in Jai Balaji Industries for Rs2.7bn. (ET)
NYSE and Nymex have evinced interest in acquiring stake in MCX, promoted by Financial Technologies. (ET)
Moser Baer, Titan Energy and Videocon have applied for availing benefits under the semiconductor policy with a combined investment value of Rs200bn. (BL)
Tata Chemicals is planning to increase its soda ash and urea manufacturing capacities to 1.2mn tons each by September 2008 through de-bottlenecking. (BL)
SRF is planning to invest Rs2.6bn for setting up a Greenfield packaging film manufacturing plant and a captive win power turbine over the next two years. (BL)
Ceat is looking at states like Maharashtra, Gujarat, Tamil Nadu and Andhra Pradesh for setting up a greenfield radial plant. (FE)
Cement industry is expected to add 110mn tons of production capacity in next three years at an investment of Rs500bn. (ET)
QIBs may have to fork out 100% margin money upfront while bidding for shares in an IPO. (ET)
Tile Industry has sought an anti dumping duty on import of glazed wall and floor tiles. (BL)
Department of Fertiliser has sought Rs50bn as a capital support to revamp plants of Hindustan Fertiliser Corporation and Fertiliser Corporation of India. (FE)
Export Oriented Units are likely to continue to enjoy income tax benefits even after the deadline of March 2009. (BS)
The Finance Ministry has rejected a proposal to give tax incentives to captive and merchant power plants. (BS)
Indian PC market grew by 25.1% yoy in terms of unit shipments to 1.8mn during Q3 FY08. (BS)
Domestic auto component companies are investing Rs300bn to cash in on the current boom. (BS).
Precious metals register marginal gains
Falling oil price and recovering dollar cap precious metals’ gains
Gold and silver prices fell earlier today, Monday, 17 December, 2007 but ended the day with limited or marginal gains. Gold's gains were limited after the euro fell for the third straight session against the dollar. Falling oil price and strengthening dollar capped precious metals’ earlier gains of the day. Gold generally moves in the opposite direction of the U.S. currency.
Comex Gold for February delivery rose $1.3 (0.16%) to close at $799.3 an ounce on the New York Mercantile Exchange today. Earlier the price fell to almost $792/ounce. Last week, prices rose by almost 0.3% ($2.2/ounce). On, 7 November, prices had touched $848/ounce. It was the highest price after a record $873 on 21 January, 1980.
Comex Silver futures for March delivery were almost unchanged at $13.98 an ounce. Prices touched 26 year high on 7 November, after reaching $16.275. The metal has climbed 8% this year.
Gold has traditionally been used as a safe-haven asset against rising inflation. Investor sentiments are boosted by the fact that gold and silver are alternate sources of good investment in the face of declining dollar and rising energy prices. Rising crude increases inflationary pressures and vice versa. On the other hand strong dollar reduces the appeal of the metal as alternate source of investment.
In the currency market today, the dollar weakened earlier but then began trading mostly higher, benefiting from U.S. fund inflow data and weak data from the eurozone. The dollar index, which tracks the performance of the greenback against a basket of other major currencies, edged down 0.07% at 77.380.
In the energy market, oil prices slipped by 64 cents and closed at $90.6/barrel after traders became more concerned about economic growth.
Gold had climbed 25% this year till date as lower interest rates had sent the dollar tumbling, and crude-oil prices rose to a record. Dollar is still 11% down against the euro this year.
In 2006, silver had jumped 46% while gold gained 23%.
Last week on 11 December, Federal Reserve lowered the federal funds rate by a quarter-point to 4.25%. The Fed also lowered its discount rate, the interest it charges on direct loans it makes to banks, by a quarter-point to 4.75%.
Dollar had been witnessing a free fall since Federal Reserve cut interest rates in September. Before 11 December, Federal Reserve had cut the fed funds rate by a quarter-point to 4.50% on 31 October, 2007. Prior to that, Federal Reserve had cut interest rates by half percentage point on 19 September, 2007.
At the MCX, gold prices for February delivery closed unchanged at Rs 10,170 per 10 grams. Prices rose to a high of Rs 10,199 per 10 grams and fell to a low of Rs 10,081 per 10 grams during the day’s trading.
At the MCX, silver prices for March delivery closed Rs 24 (0.13%) lower at Rs 18,494/Kg. Prices opened at Rs 18,576/kg and fell to a low of Rs 18,253/Kg during the day’s trading.
Crude drops for third consecutive day
Crude prices slip as OPEC hints at increasing production in next meeting
Crude prices slipped today as traders speculated that demand is likely to slow down due to economic growth concerns. Comments from Organization of Petroleum Exporting Countries (OPEC) official regarding increasing production in next meeting also led to crude prices slipping. This was the third consecutive drop in crude prices.
For the day ending Monday, 17 December, 2007, crude-oil futures for light sweet crude for January delivery closed at $90.63/barrel (lower by $0.64/barrel or 0.7%) on the New York Mercantile Exchange. Price earlier slipped by more than $1.7/barrel during the day. Prices reached a high of $99.2 on 21 November. The Nymex January contract expires at the close of trading tomorrow. The more-widely held February contract fell 50 cents to $91.05 a barrel.
As per the Algerian Oil Minister, Chakib Khelil, OPEC may decide to increase quotas when it meets 1 February, 2008. He is expected to take over as President of OPEC on 1 January, 208.
Members of the OPEC left production targets unchanged at the 5 December meeting in Abu Dhabi. The group, which produces 40% of the world's oil, will review output at a 1 February meeting in Vienna.
In the currency market today, the dollar weakened earlier but then began trading mostly higher, benefiting from U.S. fund inflow data and weak data from the eurozone. The dollar index, which tracks the performance of the greenback against a basket of other major currencies, edged down 0.07% at 77.380.
Brent crude oil for February settlement fell $0.40 (0.4%) to $91.29 on the London-based ICE Futures Europe exchange.
Global oil demand to rise 2.8% in 2008
Natural gas in New York was little changed on a forecast for climbing temperatures through the end of December. Gas for January delivery rose 1 cent to settle at $7.035 per million British thermal units.
Against this backdrop, January reformulated gasoline fell 0.63 cents to $2.3354 a gallon and January heating oil edged down 1 cent at $2.5979 a gallon.
As per EIA, global oil markets will likely remain tight through 2008 and monthly average oil prices are expected to near $85 per barrel over the next year. The IEA, an adviser to 27 nations, said global demand in 2008 will rise 2.5% to 87.8 million barrels a day.
At the MCX, crude oil for January delivery closed at Rs 3556/barrel, lower by Rs 42 (1.2%) against previous day’s close. Natural gas for December delivery closed unchanged at Rs 278.2/mmtbu.
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