Wednesday, December 19, 2007
The market closed with marginal gains after making a come back in the final trading hour of the session. The market opened on a strong note on the back of favoring cues from the global markets. Though the market opened on a firm note but unable to sustain its gains at higher levels as the profit booking across the sectoral indices scrips prevails. The BSE Mid cap closed lower by 13.45 points at 9,080.39 while Small cap closed higher by 97.24 points at 11,915.36. The BSE Sensex closed marginally up by 12.32 points at 19,091.96 and NSE Nifty closed higher by 8.85 points at 5,751.15. The BSE Sensex touched its intraday high of 19,397.76 and low of 18,886.40 during the trading session. Overall, the market breadth was week as 1,882 stocks are closed in green while 1030 stocks are closed in red.
BSE Health Care index slipped by 14.16 points to close at 4,247.16 as Opto Circuit (3.59%), Dr. Reddy (2.83%), Biocon (1.59%), Glenmark (1.50%) and Nicholas Piramal (1.02%) closed lower.
BSE Metal index closed higher by 124.47 points at 18,202.10. Scrips that grew are SH. Precoated (9.88%), Ispat industries (5.22%), Nalco (3.32%), Jindal Saw (3.15%), JSW Steel (2.54%).
BSE FMCG index closed up by 14.18 points at 2224.19. Scrips that grew are Tata Tea (2.34%), United Spirits (1.49%), ITC (0.94%), HUL (0.40%) and Nestle (0.27%).
BSE Realty index dropped by 51.32 points to close at 11,603.26 as Phoenix mill (8.01%), Anant Raj (6.21%), Akruti (1.18%), Omaxe (1.38%), Sobha Developers (1.38%) and Parsvnath (1.17%).
BSE Oil & Gas index slipped by 28.88 points to close at 12,280.80. Scrips that fell are GAIL (3.64%), Aban Offshore (1.57%), IOCL (1.52%), Reliance industries (0.88%) and RNRL (0.81%).
BSE Bankex index closed flat at 10,763.96 as IOB (3.57%), Union bank (2.85%), Yes bank (2.73%) closed lower while Canara bank (2.34%), ICICI bank (1.79%) and Federal bank (0.33%) closed higher.
Market saw its initial profits evaporate as weak open in European markets triggered late selling in pharma, realty, oil & gas and several major counters. Yesterday, the European Central Bank pumped 350 billion euros in Europe’s money market as a part of coordinated attempt by the world’s central banks to restore confidence in global financial system. This caused domestic market open with a huge positive gap today. The Sensex opened firm at 19,255 but lost its grip and entered into the negative by afternoon. Across-the-board selling towards the close saw the Sensex plunge deep into the red to touch the day's low of 18,886. However, buying at lower levels helped the Sensex recover most of its losses and enter into the positive to end the session with a gain of 12 points at 19,092, while the Nifty added 9 points to close at 5,751.
Breadth of the market was positive. Of the 2,941 stocks traded on the Bombay Stock Exchange (BSE) 1,883 stocks advanced, 1,030 stocks declined and 28 stocks remained unchanged. Among sectoral indices, BSE CD index gained 1.03%, while BSE FMCG index, BSE IT index, BSE Metal index, BSE Power index, BSE PSU index and the BSE Tech index closed with moderate gains. However, BSE Auto index, BSE CG index, BSE HC index, BSE Oil & gas index and BSE Realty index closed in the red.
Select heavyweights edged higher on decent buying support. Reliance Energy rose 4.12% at Rs1,883, ONGC jumped 2.65% at Rs1,181, ICICI Bank advanced 1.79% at Rs1,161, Infosys added 1.09% at Rs1,638, while TCS, Tata Steel, ITC, M&M, L&T and Ranbaxy closed with marginal gains. However, select front-line stocks came under selling pressure. ACC was the major loser and dropped 3.40% at Rs1,031. Among other draggers, HDFC declined 2.44% at Rs2,744, Maruti Suzuki dropped 2.39% at Rs995 and SBI shed 1.97% at Rs2,258.
Over 3.73 crore Ispat Industries shares changed hands on BSE followed by IKF Technologies (2.86 crore shares), GV Films (2.60 crore shares), Himachal Futuristic Communications (2.50 crore shares) and Kashyap Technologies (1.96 crore shares).
Valuewise, Ispat Industries registered a turnover of Rs316 crore on BSE followed by Jyoti Laboratories (Rs289 crore), Reliance Industries (Rs289 crore), IFCI (Rs188 crore) and Reliance Energy (Rs156 crore).
The market staged a strong comeback in late trade after the Sensex fell below 19,000 mark in mid-afternoon trade. The market had weakened in mid-afternoon trade in what was a choppy trading session. Earlier, the market had come sharply off higher level from an initial surge. Consumer durable and metal stocks gained. Auto stocks declined. Reliance Industries declined. Reliance Energy and ONGC were major gainers from Sensex pack. European markets were trading lower. Asian indices were mixed today, 19 December 2007. US stocks rose on Tuesday, 18 December 2007.
The country's gross domestic product (GDP) growth can be scaled up to 10% by 2012 with the right set of policies, but the subprime crisis in the US might impact exports and capital flows, prime minister Manmohan Singh said on Wednesday, 19 December 2007, at a meeting of state chiefs and other top policymakers.
The 30-share BSE Sensex rose 12.32 points or 0.06% to 19,091.96. Sensex hit a low of 18,886.40 in mid-afternoon trade. At day's low, Sensex had lost 193.24 points. Sensex hit a high of 19,397.76 in early trade, a gain of 318.12 points.
The broader CNX S&P Nifty gained 8.85 points or 0.15% to 5,751.15
BSE clocked a turnover of Rs 8004 crore compared to Tuesday (18 December 2007)'s Rs 8,052.65 crore.
Nifty December 2007 futures were at 5800.15, at a premium of 49 points as compared to the spot closing of 5751.15.
The NSE's futures & options (F&O) segment turnover was Rs 79,137.15 crore, which was higher than Rs 74,579.26 crore on Tuesday, 18 December 2007.
The BSE Mid-Cap index was down 0.15% to 9,080.39. It underperformed Sensex. The BSE Small-Cap index was up 0.82% to 11,915.36. It outperformed Sensex.
BSE PSU index (up 0.15% to 9,563.01), BSE Power index (up 0.18% to 4,222.80), BSE IT index (up 0.44% to 4,181), BSE FMCG index (up 0.64% to 2224.19), BSE Metal index (up 0.69% to 18,202.10) and BSE Consumer Durables index (up 1.03% to 6,122.32) outperformed Sensex.
BSE Capital Goods index (down 0.02% to 18,898.17), BSE Oil & Gas index (down 0.23% to 12,280.80), BSE Health Care index (down 0.33% to 4,247.16), BSE Realty index (down 0.44% to 11,603.26) and BSE Auto index (down 0.7% to 5,525.64) underperformed Sensex.
The market breadth was strong. On BSE, 1,849 shares advanced as compared to 1,026 that declined. 26 shares were unchanged. 15 of the 30 Sensex stocks declined.
India’s largest private sector firm by market capitalization & oil refiner Reliance Industries declined 0.88% to Rs 2,704.75. The stock came off session's high of Rs 2,780.
Reliance Energy (REL) rose 4.12% to Rs 1,882.60. The company is reportedly planning to foray into Africa. It is believed to be in talks with the governments of Botswana, Tanzania and Zambia for setting up generation capacities of over 1,000 megawatt (MW). The company’s African Safari will be followed by a bid for a 1,200 MW greenfield project at Yanbu in Saudi Arabia, the reports added.
Metal stocks were mixed. Tata Steel (up 0.96% to Rs 824.20), National Aluminium company (up 3.32% to Rs 428.50) edged higher. Steel Authority of India (down 0.56% to Rs 258.30) and Hindalco Industries (down 0.68% to Rs 198.35) edged lower.
Consumer Durable stocks rose. Titan Industries (up 2.56% to Rs 1,497.05), Videocon Industries (up 4.29% to Rs 646), edged higher.
Gitanjali Gems rose 3.13% to Rs 418.50. The company announced during the market hours today that Gitanjali Lifestyle (GLL), a wholly subsidiary of the company is signing a memorandum of understanding (MoU) with Mariella Burani Fashion Group (MBFG) of Italy to form a joint venture in India by way of incorporation of a new company. The objective of the proposed joint venture is to significantly drive growth of MBFG's brands in emerging markets.
Auto stocks declined. Tata motors (down 1.59% to Rs 691.10), Bajaj Auto (down 0.66% to Rs 2,776.80) and Maruti Suzuki India (down 2.39% to Rs 995.30) edged lower.
Mahindra & Mahindra (up 0.86% to Rs 777.30), Hero Honda Motors (up 0.29% to Rs 704) edged higher.
ONGC (up 2.65% to Rs 1,180.50), ICICI Bank (up 1.79% to Rs 1,161.05) and Infosys (up 1.09% to Rs 1,638.10) edged higher.
HDFC (down 1.75% to Rs 2,763), Grasim Industries (down 1.68% to Rs 3,575.20), State Bank of India (down 1.97 % to Rs 2,258.30) and ACC (down 3.4% to 1,030.65) edged lower.
Larsen & Toubro rose 0.77% to Rs 3,998.25 after the company said it had received a contract worth Rs 287 crore to build an elevated road to Mumbai International Airport.
Ispat Industries clocked the highest volume of 3.73 crore shares on BSE. The stock rose 5.22% to Rs 85.60. IKF Technologies clocked the second highest volume of 2.86 crore shares on BSE. The stock rose 9.13% to Rs 14.22. G V Films clocked the third highest volume of 2.6 crore shares. The scrip rose 6.78% to Rs 11.49. Himachal Futuristic Communications clocked the fourth highest volume of 2.5 crore shares. The stock hit 5% upper circuit at Rs 42.75. Kashyap Technologies clocked fifth highest volume of 1.96 crore shares. The stock declined 4.46% to Rs 5.35.
Ispat Industries clocked the highest turnover of Rs 316.39 crore on BSE. Reliance Industries (Rs 289.78 crore), IFCI (Rs 188.32 crore), Reliance Energy (Rs 156.73 crore) and Reliance Petroleum (Rs 146.08 crore) were other turnover toppers in that order.
European markets were trading lower today. Germany’s DAX (down 0.29% to 7,827.99) and UK’s FTSE 100 (down 0.09% to 6,273.40) edged lower.
Most of the Asian indices were mixed today, 19 December 2007, tracking overnight gain in US stocks. Key benchmark indices in Hong Kong’s Heng Seng (up 1.11% to 27,029.26) and Taiwan’s Taiwan Weighted (up 2.65% to 8,014.34) edged higher. Japan’s Nikkei 225 (down 1.17% to 15,030.51), Straits Times (down 0.36% to 3,357.34) edged lower.
US stocks rose on Tuesday, 18 December 2007, as investors bought beaten-down shares of technology heavyweights such as IBM and Microsoft Corp on hopes that the tech sector would weather the impact of the credit crisis. An upbeat profit forecast from design software maker Adobe Systems Inc lifted optimism in the tech sector, a day after the Nasdaq slid more than 2%.
The Dow Jones industrial average advanced 65.27 points, or 0.50%, to 13,232.47. The Standard & Poor's 500 Index gained 9.08 points, or 0.63%, to close at 1,454.98. The Nasdaq Composite Index jumped 21.57 points, or 0.84%, at 2,596.03, snapping a three-day losing streak. Wall Street gains were also helped by optimism on an easing of the subprime credit crunch after a cash injection by the European Central Bank as part of the effort by global central banks to shore up credit markets.
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 four trading sessions are left for expiry of December 2007 derivatives contracts.
The market is likely to open on a positive note as most of the Asian markets are trading higher. The trigger for the market is fresh $500 billion inflow by the European Central Bank to the banking system as a part of global effort to ease credit-market gridlock in the US. The Nifty is more likely to pierce 5,900 levels while Sensex could be around 19,450 levels.
However, profit booking at the higher levels is not ruled out. The culprit would be the foreign institutional investors (FIIs) who are in sell mode in the derivative segment. The FIIs have been net sellers in the December contracts worth Rs 7,500 crore while making net buys in cash segment worth Rs 3,500 crore. The FIIs selling pressure is likely to continue for the remaining five days of the expiry of current month series.
Technically Nifty is still looking weak on the charts and hence it can now test 5,696, which is 61.80% retracement level of the recent rally from 5,394 to 6,185. If Nifty breaks this level then we may see further downside. One can look at the buying Put near 5,800 strikes, as Nifty may not trade below 5,700 level. For today, Nifty has resistance in the range of 5,890 to 5,900.
The market is likely to see further action on the back of a firm US markets and around 1% gains in majority of the Asian indices in the prevailing trades. Surging FII fund inflows and presence of bullish sentiment may help the market advance further. Among the key local indices, the Nifty has a strong support at 5600, while on the upside the index could test higher level at 6000. The Sensex has a likely support at 18600 and may face resistance at 19830.
US indices gained on Tuesday after the strong earnings from Goldman Sachs offset by concerns about how the credit market crisis will impact the economy. The Dow Jones soared about 65 points to 13232, while the Nasdaq surged by 22 points at 2596.
Indian ADRs witnessed strong buying support on US bourses. Except Patni Computers most of the ADR's notched up significant gains. The other Indian floats, HDFC Bank, ICICI Bank, VSNL, Infosys, Satyam, Tata Motors, MTNL, Rediff and Dr Reddy's surged over 1-4% each.
Crude oil prices slipped marginally. The US light crude oil for January series declined by 14x cents at $90.49 a barrel. In the commodity space, the Comex gold for February delivery surged by $8.10 to settle at $807.40 an ounce.
We recommend a buy in SpiceJet at current market price. From the weekly chart of SpiceJet, we note that it has been on a broad sideways consolidation between Rs 50 and Rs 65 since early June 2007.
On December 17, the stock broke out of this sideways consolidation and jumped up by 16 per cent, accompanied with heavy volume.
Breakout of the long-term resistance level of Rs 65 indicates beginning of a new uptrend. Moreover, the stock is trading well above the 21- and 50-day moving average line. The volume has been increasing in the past five trading sessions. The daily as well as weekly momentum indicators are featuring in the bullish region. The moving average convergence divergence is steadily rising in the positive region indicating bullish momentum.
The immediate support for the stock is pegged at Rs 55 and the next support is at Rs 50.
Short-term investors with high risk profile can buy the stock while maintaining the stop-loss at Rs 61. We expect the stock to move up to the immediate resistance level at Rs 80 in the short-term.
Buy Suven Life Sciences with a stop loss of Rs 38 for a target of Rs 60.
Buy Redington with a stop loss of Rs 385 for a target of Rs 495
Buy Gujarat Alkalies on dips with a stop loss of Rs 205 for short-term targets of Rs 245-260.
The market may edge higher today, 19 December 2007, taking cue from firm Asian equities. But 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 five trading sessions are left for expiry of December 2007 derivatives contracts.
Asian stocks edged higher today, 19 December 2007, tracking overnight gain in US stocks. Key benchmark indices in Hong Kong, Japan, Singapore, Taiwan and China were up by between 0.04% to 2.5%.
US stocks rose on Tuesday, 18 December 2007, as investors bought beaten-down shares of technology heavyweights such as IBM and Microsoft Corp on hopes that the tech sector would weather the impact of the credit crisis. An upbeat profit forecast from design software maker Adobe Systems Inc lifted optimism in the tech sector, a day after the Nasdaq slid more than 2%.
The Dow Jones industrial average advanced 65.27 points, or 0.50%, to 13,232.47. The Standard & Poor's 500 Index gained 9.08 points, or 0.63%, to close at 1,454.98. The Nasdaq Composite Index jumped 21.57 points, or 0.84%, at 2,596.03, snapping a three-day losing streak.
Wall Street gains were also helped by optimism on an easing of the subprime credit crunch after a cash injection by the European Central Bank as part of the effort by global central banks to shore up credit markets.
As per provisional data, foreign institutional investors (FIIs) sold shares worth a net Rs 2736.48 crore on Tuesday. Domestic institutions bought shares worth a net Rs 659.15 crore on that day.
FIIs were net sellers to the tune of Rs 1,077.36 crore in the futures & options segment on Tuesday. According to data released by the NSE, FIIs were net sellers of index futures to the tune of Rs 1,080.14 crore and bought index options worth Rs 749.07 crore. They were net sellers of stock futures to the tune of Rs 746.30 crore.
Fall in index heavyweights pulled Sensex down 181.71 points or 0.94% to 19,079.64, on Tuesday 18 December 2007.
Market Grape Wine :
In House :
Nifty at a supp of 5710 & 5652 levels with resistance 5787 and 5835 levels .
Inrtra day : Buy Bharti Airtel above 928.50 TGT 945 with SL 919.
Intra day :Buy Dr Reddy above 731 TGT 751 with S/L 720.
F & O : Intraday: Buy Bank of baroda above 425 TGT 441 with S/L 418.
F & O : Intraday : Buy Omax above 555 TGT 575 with S/L 548.
Out House :
Markets at a support of 19012 & 18786 levels with resistance at 19454 & 19786 levels .
Buy : RIL & REL
Buy : Aptech & DeepakFert
Buy : JpAsso & Jphydro
Buy : EssarOil
Buy : SKumar & ABAN
Buy : IBUllsreal & IBullsFin
Buy : Neyvelli & Geshipping
Buy : Kotak & SBIN
Buy : IOlBroad & Primesecu Bullet
Dark Horse : Aban , NTPC , PrimeSec , JpAsso , IBullReal , KOTAK , GeShipping , RIL & SBIN
eClerx Services 270 to 315 25 to 30
BGR Energy 425 to 480 370 to 380
Transformers & Rectifiers 425 to 465 320 to 325
Brigade Enterprises 351 to 390 15 to 20
Jyothy Lab. 690 130 to 150
Burnpur Cement Ltd. 12 4 to 5
Aries Agro 120 to 130 12 to 15
Manaksia Ltd. 140 to 160 40 to 45
Porwal Auto Components 68 to 75 10 to 12
Precision Pipes & Profiles 140 to 150 25 to 30
The market is likely to have positive opening on the back of firm cues from the global markets. Yesterday, The market closed on a negative note after facing a lot of volatility. 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 manages to hold its gains at higher levels and closed lower. 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. We expect the market to gain some grounds today during the trading session.
On Tuesday, the US market closed in green. On Tuesday, the DJIA closed higher by 65.27 points at 13,232.47 along with NASDAQ by 21.57 points to close at 2,596.03 and S&P 500 index by 9.08 points to close at 1,454.98.
Indian ADRs ended in positive territory. In technology sector, Infosys grew by (2.46%) along with Satyam by (0.68%) and Wipro by (0.57%). In banking sector, HDFC bank and ICICI bank surged (4.07%) and (1.93%) respectively. In telecommunication sector, MTNL and VSNL inched up by (2.86%) and (2.22%) respectively.
The major stock markets in Asia are trading firm. Hang Seng is trading up by 339.66 points at 27,072.53. Japan''s Nikkei is trading higher by 6.39 points at 15,214.25. Taiwan weighted is trading strong at 7,985.57 up by 178.18 points. Singapore Strait times is trading up by 37.61 points at 3,406.92.
On Tuesday, the FIIs stood as the net seller in equity and net buyer in debt. The gross equity purchased was Rs4, 117.70 Crore and the gross debt purchased was Rs385.40 Crore while the gross equity sold stood at Rs5, 216.40 Crore and gross debt sold stood at Rs0.00Crore. Therefore, the net investment of equity reported was (Rs1, 098.70 Crore) and net debt was Rs385.40Crore.
Today, Nifty has support at 5,698 and resistance at 5,837 and BSE Sensex has support at 18,936 and resistance at 19,416.
Crude prices slipped today for the fourth consecutive day. Prices slipped as Turkish troops began to withdraw from Iraq. Price also fell on speculation that warmer weather in the eastern U.S. will curb fuel use.
For the day ending Tuesday, 18 December, 2007, crude-oil futures for light sweet crude for January delivery closed at $90.49/barrel (lower by $0.14/barrel or 0.2%) on the New York Mercantile Exchange. Futures rose as high as $92.88 and fell as low as $88.88 today. The January contract expires today. The more-active February contract dropped 97 cents (1.1%) to $90.08 a barrel.
Earlier in the day, about 300 Turkish troops crossed into northern Iraq in a raid against Kurdish rebels. That’s when crude price shot up beyond $92/barrel. But when the troops began withdrawing, prices fell.
Turkey has been fighting the Kurdistan Workers' Party, or PKK, which is seeking autonomy for Turkey's largely Kurdish southeast and uses northern Iraq as a base from which to attack Turkish forces since the past 20 years.
Yesterday, as per the Algerian Oil Minister, Chakib Khelil, OPEC might 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.
Brent crude oil for February settlement fell $1.17 (1.3%) to $90.12 on the London-based ICE Futures Europe exchange.
Natural gas rises but gasoline and heating oil drop
Natural gas rose as speculators who had sold contracts in bad bets on falling prices bought the positions back to protect gains or limit losses. Gas for January delivery rose 10.6 cents (1.5%) to settle at $7.141 per million British thermal units.
Against this backdrop, January reformulated gasoline fell 3.11 cents at $2.3043 a gallon and January heating oil lost 4.25 cents at $2.5554 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 3530/barrel, lower by Rs 26 (0.7%) against previous day’s close. Natural gas for December delivery closed unchanged at Rs 281.6/mmtbu, higher by 3.4/mmtbu (1.2%).
Every man serves a useful purpose: A miser, for example, makes a wonderful ancestor.
Weakness, volatility and four straight days of declines may have served some useful purpose for those picking stocks. The bulls would be looking to regain their composure today and triumph over the resurgent bears. And, with good global indicators, they may find the task less arduous. The injection of huge funds by the European Central bank (ECB) and steps taken by other western central banks to reign in the carnage in credit markets has helped prop up sentiment across global markets. The latest measures to restore confidence across global credit markets are in line with the concerted effort launched by leading central banks, led by the Federal Reserve, last week. But, despite the series of steps being taken to resolve the credit market crisis, it remains to be seen how effective they will prove in the long run. That perhaps explains why the western equity markets weren't quite on fire overnight.
Coming to our market, we expect the modest gains in the US and other markets to have a soothing effect on the sentiment. The market will remain choppy amid a fresh round of selling by the FIIs and lack of major local triggers. Small-cap and mid-cap shares will continue to hog the limelight, though there is a danger that the wild intra-day fluctuations may hurt some investors, especially the smaller ones. With very few trading days left in the month, and a few public holidays approaching, investors would do well to take a slightly longer term view. Shares of Jyothy Labs will be listed on the bourses today. The offer price has been fixed at Rs 690 per share. The stock is likely to shoot up on debut following a successful IPO, which was subscribed nearly 46 times.
Deccan Aviation may extend gains as the company's Board will today consider a report from consulting firm Accenture on the proposed merger with Kingfisher Airlines. IFCI will remain in the limelight as it may announce the name of the winning bidder. Reports suggest that the Sterlite-Morgan Stanley combine has emerged as the highest bidder, but negotiations are still on between the two camps on the stake sale process.
Dr. Reddy's could come under some stress amid reports that ICICI Venture and Citigroup Venture Capital are planning to sell their stake in the company's R&D outfit, Perlecan Pharma. Another stock to keep an eye on is Kopran. A financial daily says that the company's promoters and Clearwater Capital are planning to sell their 44% stake to a Mumbai-based unlisted pharma company.
Elder Pharma might attract some attention as it has entered into a licensing agreement with Italy-based research oriented biotech company GNOSIS SpA for marketing and distribution of an anti-arthritic product in India. Public sector fertilizer major RCF may gain amid reports that the company is planning to cash in on high real estate prices in Mumbai by developing a 200,000 sq. ft. commercial complex in Chembur.
HCL Technologies has announced a multi-year, multi service agreement with Merck & Co., Inc., expanding upon the existing relationship that began in 2004.
US stocks rose for the first time in three days on speculation that the European Central Bank's (ECB) injection of US$500bn into the financial system will help the world's largest economy combat the ongoing correction in the housing sector.
All 10 Standard & Poor's 500 Index industries ended higher. Fannie Mae and Freddie Mac, the two largest providers of funds for home loans, had the biggest and fourth-biggest advances in the gauge.
The S&P 500 gained 9 points, or 0.6%, to 1,454.98, bringing its gain for the year to 2.6%. The Dow Jones Industrial Average added 65 points, or 0.5%, to 13,232.47. The Nasdaq Composite Index added 22 points, or 0.8%, to 2,596.03.
Market breadth was positive. About 14 stocks rose for every five that dropped on the New York Stock Exchange.
Goldman Sachs reported higher quarterly sales and earnings that topped estimates, despite the credit crisis. Nonetheless, shares fell, as investors adopted a 'sell the news' approach.
Best Buy reported higher quarterly sales and earnings that came in ahead of estimates, thanks to extra shopping days in November and more store openings. However, the electronics retailer cautioned that December and fourth-quarter sales will be constrained. Shares slipped during the session but rallied near the close.
Adobe Systems reported higher quarterly sales and earnings that beat forecasts and said it plans to buy another 30mn shares next year in addition to the 20mn it already announced.
After the close, Palm reported a quarterly loss versus a profit a year ago and warned that it expects to post a loss of 14 cents to 16 cents in the current quarter, steeper than what analysts are expecting. Shares slumped 11% in after-hours trading.
Wednesday brings earnings from Morgan Stanley, the Mortgage Bankers' Association's latest mortgage purchases news and comments from Richmond Federal Reserve President Jeffrey Lacker.
In the day's economic news, housing construction and building permits dropped in November, according to a government report. The decline was smaller than what Wall Street economists had forecast.
The Federal Reserve proposed a much stricter set of rules for mortgage lenders as part of the central bank's effort to combat shady lending practices.
Treasury prices fell slightly, lowering the yield on the 10-year note to 4.12% from 4.14% late on Monday. In currency trading, the dollar slipped versus the euro and gained against the yen.
US light crude oil for January delivery fell 14 cents to settle at $90.49 a barrel on the New York Mercantile Exchange. COMEX gold for February delivery rose $8.10 to settle at $807.40 an ounce.
Shares in Europe ended virtually flat. The pan-European Dow Jones Stoxx 600 index closed with a loss of 0.1% to 360.42. The UK's FTSE 100 was virtually flat, closing at 6,279.30, while the German DAX 30 rose 0.3% to 7,850.74 and the French CAC-40 closed 0.1% higher at 5,509.37.
The mixed performance came on a day when the ECB allotted US$501bn to banks as part of a global effort to ease the tension in global credit markets.
Brazilian and Mexican stocks closed higher though. In Sao Paulo, the Bovespa climbed 2.1% to 61.096.28 while in Mexico City, the IPC ended 1% higher at 29,254.98. Chile's IPSA, however, shed 0.1% to 2,945.56 and Argentina's Merval index slipped 1.5 points to 2,125.67.
In other emerging markets, the RTS index in Russia was up 0.8% at 2269 while the ISE National-30 index in Turkey added 1.3% to 69,073.
Most Asian markets were trading higher. The Nikkei in Tokyo was nearly flat at 15,214 while the Hang Seng in Hong Kong rose 324 points to 27,057. The Kospi in Seoul gained 21 points to 1861 while the Straits Times in Singapore was up 36 points at 3405 and the Shanghai Composite in China was up 77 points at 4913.
Bulls look to regain control
Market opened with a positive gap in the early trades defying global cues, however couldn’t hold on to their gains and turned choppy. Thereafter, market witnessed wild intra-day swings as the benchmark Sensex which hit an intra-day high of 19,375.07 ended at 19,079 slipping over 290 points from day’s high. While the broader Nifty index slipped 34 points to close at 5,742.
Essar Oil surged by over 10% to Rs281 after the company announced that they would sell $2bn of securities to founders. The scrip has touched an intra-day high of Rs298 and a low of Rs255 and has recorded volumes of over 2,00,00,000 shares on NSE.
Air Deccan surged by over 11% to Rs316. According to reports the Government has refused UB Group’s request to consider Air Deccan and Kingfisher Airlines as one entity unless they are merged. The scrip touched an intra-day high of Rs320 and a low of Rs283 and recorded volumes of over 31,00,000 shares on NSE.
Ceat was down 1% to Rs205. According to reports the company is looking at states like Maharashtra, Gujarat, Tamil Nadu and Andhra Pradesh for setting up a greenfield radial plant. The scrip touched an intra-day high of Rs211 and a low of Rs201 and recorded volumes of over 93,000 shares on NSE.
SRF slipped 1.2% to Rs180. Reports stated that the company was 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. The scrip touched an intra-day high of Rs187 and a low of Rs176 and recorded volumes of over 12,00,000 shares on NSE.
ONGC gained 1.3% to Rs1150. According to reports the company is likely to face delay in production from KG basin as DGH requires more time for appraisal and conceptual development plan. The scrip touched an intra-day high of Rs1198 and a low of Rs1141 and recorded volumes of over 49,00,000 shares on NSE.
Reliance Communication edged lower by 0.5% to Rs714. According to reports the company would invest Rs8bn to toll out a telecom network - fixed and mobile - in Uganda. The scrip touched an intra-day high of Rs730 and a low of Rs710 and recorded volumes of over 43,00,000 shares on NSE.
Bajaj Auto gained 0.3% to Rs2800 after media reports stated that the Bombay High Court approved Bajaj Auto demerger plans and also stated that record date likely to be 2 months from date of order. The scrip touched an intra-day high of Rs2900 and a low of Rs2727 and recorded volumes of over 2,00,000 shares on NSE.
HDIL marginally slipped 1.2% to Rs953. Reports stated that the company plans to invest Rs10bn in setting up 150 theaters by FY09. The scrip touched an intra-day high of Rs992 and a low of Rs923 and recorded volumes of over 11,00,000 shares on NSE.
What the FIIs are doing
FIIs were net sellers of Rs27.36bn (provisional) in the cash segment on Tuesday while the local institutions pumped in Rs6.59bn. In the F&O segment, foreign funds were net sellers of Rs10.77bn on the same day.
On Monday, FIIs were net sellers of Rs10.99bn in the cash segment. Mutual Funds were net sellers of Rs1.99bn on the same day.
Stocks in News:
PowerGrid Corporation plans foray into entertainment business and is in talks with Zee Network for a JV. (BL)
Pfizer is short of clinical research staff as it is set to expand the number of trials done in India. (BL)
Royal Orchid would make an international foray with plans to develop a 150-room beach resort over a 30-acre property in Dar-es-Salaam, Tanzania. (BL)
JSW Steel looking at buying an ore mine in Latin America. (BL)
The hearing for US$400mn claim filed by Flag Telecom against VSNL would be decided by early 2008. (BL)
BEML expects to start producing medium speed rail coaches from 2008-09. (BL)
BEML expects Rs40bn order book by the end of the current financial year. (BS)
Wockhardt is conducting phase-II clinical trials of an anti-infective molecule WCK771. (BS)
Maruti has offered discounts ranging from Rs18,500 to Rs57,500 across models before January price hike. (BS)
Indian Oil Corporation has set aside US$3bn for overseas acquisition. (BS)
Jindal Power likely to invest over Rs50bn in adding another 1,320MW to its thermal power project in Chhattisgarh. (BS)
Voltas has entered the water treatment business. (BS)
The Bombay High Court has approved the demerger of Bajaj Auto into two separate entities. (BS)
Rallis India plans foray into newer specialty chemicals segment and will look at areas such as construction chemicals. (BS)
GTL Infra to invest $450-600mn over next three years for setting up telecom towers. (ET)
Glenmark to acquire multi generic front end US$15mn company in Europe. (ET)
REL plans to foray in to Africa, to bid for projects in 3 African countries. (ET)
HDFC has sought the approval of NHB to retain stake in HDFC Bank. (ET)
Spice Jet, Air Deccan to hike prices by around Rs500-1,000. (FE)
PSU banks to go on strike from February if proposed plan on consolidation and mergers is not withdrawn. (FE)
Farmers' association wants a removal of ban on wheat and rice futures. (BL)
Regulators agree to partially open the ECB window for NBFCs. (FE)
States to meet Prime Minister to take up new mineral policy. (FE)
The Government to ease norms governing airport construction, to allow new airports to come up within 150km of existing ones. (FE)
Maharashtra Government plans to invest in Co-Operative Sugar factories to reduce burden of loans. (FE).
The markets opened on an bearish note and swung between the bull and bear camps before ending with net losses. The traded volumes were lower and the market breadth was negative.
The combined exchange figures were 1659:2417 and the capitalisation was negative as the commensurate figures were Rs 13298 crore:Rs 14228 crore. The 5690 support pivot acted as an intraday floor for the bulls as the bears were unable to push markets lower beyond this threshold.
The coming session is likely to witness a range of 5640 on declines and 5840 on advances. The 5780 level will act as a crucial level for day traders on Wednesday. Should the Nifty stay below this threshold, the bears may get more aggressive. Watch this threshold for signs of higher volumes on a draw down below this level.
There was a fall in number of trades and an increase in the average ticket sizes, indicating support and short-covering. The capitalisation was down on the back of price attrition in the markets. The retail risk appetite was relatively lower.
The outlook for the markets on Wednesday is that of continued caution as the overseas cues and margin calls will continue to dominate the near term trends. I maintain my view that big ticket trades must still be avoided.
Nifty — The index opened on a flat note and saw range-bound movement throughout the day’s trading. It ended the session with loss of 21 points.
20 dma and 50 dma — The index faces resistance around the 20 dma at 5829, sustaining above the 5829 level should see the index exhibit intra-day strength and test higher levels around 5874-5923. On the downside, the index has support around the 50 dma at 5737, with lower support around the 5650 level.
Conclusion — Expect intra-day support around 5737.
Gold and silver prices rise on speculation about a weaker dollar
Gold and silver prices rose today, Tuesday, 18 December, 2007. Precious metal prices rose after the traders speculated that Federal Reserve will go for more interest rate cuts to ease the credit market condition in the US. Gold generally moves in the opposite direction of the U.S. currency.
Comex Gold for February delivery rose $8.1 (1%) to close at $807.4 an ounce on the New York Mercantile Exchange today. Earlier the price rose to almost $811.4/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 rose 18.5 cents (1.3%) to $14.165 an ounce. Prices touched 26 year high on 7 November, after reaching $16.275. The metal has climbed 9.5% 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 was mostly higher today as investors weighed downbeat housing starts data against expectations that the European Central Bank's aggressive liquidity injections and the Federal Reserve's newly announced mortgage plan will help will ease the global credit crisis. The dollar index, which tracks the performance of the greenback against a basket of other major currencies, was flat at 77.405.
In the energy market, oil prices slipped by 14 cents and closed at $90.49/barrel after Turkish troops began to withdraw from Iraq and on speculation that warmer weather in the eastern U.S. will curb fuel use.
Gold had climbed 26% 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 higher by Rs 92 (0.9%) at Rs 10,262 per 10 grams. Prices rose to a high of Rs 10,310 per 10 grams and fell to a low of Rs 10,140 per 10 grams during the day’s trading.
At the MCX, silver prices for March delivery closed Rs 198 (1.07%) higher at Rs 18,692/Kg. Prices opened at Rs 18,495/kg and went to a high of Rs 18,842/Kg during the day’s trading.
Turnover in F&O segment rises
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.
Reliance Industries December 2007 futures were at premium at 2765, compared to the spot closing of 2727.55.
Reliance Capital December 2007 futures were at premium at 2459.95, compared to the spot closing of 2427.70.
Triveni Engineering & Industries December 2007 futures were at premium, at 186.45, compared to the spot closing of 182.30.
In the cash market, the S&P CNX Nifty lost 34.70 points or 0.60% at 5742.30.
Amid spiralling realty prices, it’s difficult to resist a deal when you are sitting on large tracts of unused land. But it can be a tough call when the landowner is a state-owned firm sensitive to controversies that a land deal could spark. So, what do you do? Take the first baby steps to cash in on a booming property market.
The government-controlled Rashtriya Chemicals and Fertilisers (RCF) is doing just that. The fertiliser major, which owns about 800 acres in and around Mumbai, is initially planning to develop a commercial complex over about 200,000 sq ft that will be used partially for in-house purposes while the rest will be sold commercially.
The company board has already approved the decision to build the commercial complex — to be tentatively called Priyadarshini II — and has called for a panel of architects for designing the project. RCF would develop the complex on its own and would not tie up with any developer for the complex that would come up adjacent to the company’s existing office building at Chembur. It’s the latest of Mumbai-based companies planning to develop surplus, unutilised land available with them to gain from firm land prices.
Sources close to the development said response to this project would be used by the company to chalk out future development plans subsequently. Although the company owns about 800 acres of land, most of it houses RCF’s factory and residential areas.
Despite repeated efforts, senior officials at RCF declined comment. “The company doesn’t want to go all out with the move... It would prefer to sell small parcels over a long time period,” said a source. RCF owns large tracts of land as per norms for a chemical and fertiliser company. The company makes and markets a wide range of chemical fertilisers and a series of industrial chemicals through its plants at Trombay and Thal.
RCF’s move is in line with the trend seen among large corporate houses who initially sold land and subsequently tied up with developers to jointly build projects. According to a real estate company, recent difficulties in tying up finances for buying land have forced developers to team up with companies owning land. The developer contributes a small equity while the land ownership remains with the company. Once the project is developed by the developer, the proceeds from the commercial sale could be divided between the two.
In the case of government-owned firms like RCF, there are also options of leasing out portions of land to manufacturing companies who are pressed for space and can’t buy land due to high prices.
During the past two years, more than 25 companies, including Bata India, Indian Hume Pipe and Gulf Oil Corporation, have either sold or developed their real estate assets. “This trend is not peculiar to India. Globally, companies have done it from time-to-time. Even in India, several companies have done it in the past. The difference is, it is more visible now,” said an analyst with an European brokerage. “At best, such activities would constitute 5 to 10% of the total real estate development activity,” he added.
Sharp demand for houses and commercial spaces have led prices of land to double in the past two years, especially in cities such as Mumbai, where land availability is at a premium.
The market also seems to have got a whiff of RCF’s proposed plans as shares of the company have already hit the upper trading limit twice in the past week. On Tuesday, RCF shares again ended 4.9% up at Rs 88.65 on the BSE.