Weekend Industry Trends - Dec 24 2007
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Thursday, December 20, 2007
Weekly Close: Holiday Mood !
The week started off on a major negative note. The culprit was the global credit crunch which finally impacted Indian Markets at least on sentiment. Selling was largely by foreign funds and the buyers were the domestic funds to an extent. Domestic fund were active and when the retail investors are active it is the mid caps and small caps which tend to do very well. Mid caps continued to gain confidence though they too saw intermediate levels of profit taking.
Investors shunned positions ahead of a long weekend so as to avoid event risk of the US markets over the weekend. Sensex tumbled 4.41% for the week to close at 19163. There stood two gainers Satyam by 4.11% and Infosys +3.23% while the numbers in losers were large; HDFC -11.14%, ACC - 8.68%, RCom -7.22%, NTPC -6.97%, TISCO -6.47%, Hindalco -6.44%, RIL and DLF both down by -5.89%, SBI -5.62%, Maruti -5.21%, ICICI Bank -4.71%, LNT -4.67% and Bharti -4.04%.
Global economy: India is quite integrated in the world economy and US being a big portion of that gets a big focus. Slowdown there certainly has implications which cannot be ignored. There was an event with the US Government intervening to save the borrower. That had big implications and could have further also. Rate cut is also trend across the developed nations.. Probably we may provide support. It is clear, that the US Administration will do as much as possible to ensure smooth landing of economy. How this plan can help cleanse out the system is not clear. Someone has to pay for the excesses and it so appears that the companies who have lent may bear the pain. Government intervention in a capitalist economy like US may shake investor confidence. We wont comment much here. We really wonder that Govt. intervention would help or it is just delaying the worst. Time will only tell. On Indian economy front story remains strong but on the markets front it could be different.
IT counter had bounced from there lows. Many papers reported that adverse over rupee is priced in and it may time to see something good here. The Result season is ahead and IT cos who are normally the first to declare numbers saw the trading interest. We agree that rupee impact is done .. US slowdown could weigh here. Banks are the major victim in US and big clients for Indian IT Cos. We don't expect any major turnaround here unless and until things get better in US. The stocks may see some upsides but there are headwinds of an appreciating rupee, the Tax sops going away and then the pressure of salaries.
Our research cover many stocks is our research and delivery from there was wow !
Gillette India continued to hit circuits. FMCG firms are considered as defensive play in weak markets. But Gillette itself has a growth story. It is a play on number of growing young population in India. Right now the grooming market is dominated by double edge blade system. Disposable income has increased and so also the purchasing power. Interesting to see that better lifestyle will see more numbers young men will move to the twin edge space. Gillette is well placed with its premium brand. The company has also reduced the price so as to cater the mass. The company would also leverage on on distribution network of P&G post merger. We are positive on this one with a long term prospective.
WWIL is one were our research will follow soon. The company is Multi System Operator (MSO) which provide Cable services through Local Cable Operator (LCO). Right now the prefer mode of cable viewing is Analogue and this system has led to under subscription for the industry. With digitalization major portion of under subscription would be disclosed to MSO. The industry very large but highly fragmented. MSO's are seeking consolidation in the industry. Thing would improve with digitialisation and consolidation. But this will take its own sweet time. Do await an interesting note here.
Garnet is one of the gems in our research. The company has huge land bank and it would used to develop bungalows. Now its time to cash here.
Indian Seamless Metal Tubes Limited (ISMT) produces specialized seamless tubes in India. ISMT caters to various industries like Auto, Bearings, Oil Explorations, Construction, Boilers, Engineering & Hydraulic applications. Considering the good future prospects of power segment, the company intends to focus on the power segment to sell more seamless tubes required in the Boilers and Heat Exchangers. ISMT is also into steel.. Pig iron and sponge iron route. The complete steel is procured in house and some of it is even sold. This gives an advantage to ISMT for using the right kind of alloy steel for specialized applications. More Details in our note and also our views
There was more research, including VIP Industries, Mold Teck and othres.
Technicaly speaking: Sensex has a clearly defined Resistance above 20000 on weekly basis. We see the short term trend as negative and 18500 seems to be more likely in coming days.Traders should reduce their longs on pullbacks upto 19500--19700.
Next week is the expiry of the December Futures and there is also the holiday for 25th for Christmas. Action will be limited but a Santa Claus rally can be expected as stocks get helped for the bonuses of the Fund Managers. Fundamentally, though there is little reason to be positive. News flow will be limited and with China having hiked interest rates, the emerging markets may react a bit cautiously.
Tata to unveil People's Car on Jan 10 2008
Tata Motors will display a range of new passenger vehicles, while Fiat will display passenger cars from its international range. From its commercial vehicles business, Tata Motors’ displays will include buses from the joint venture with Marcopolo of Brazil, newly developed multi-axle heavy trucks, pickup vehicles, applications of panel vans, and new mini-trucks.
In keeping with the company’s tradition of unveiling its new cars at the Auto Expo, the company will present its People’s Car, which will be unveiled at a special ceremony on January 10. Although the People’s Car will be unveiled at the Expo, the commercial launch will take place later in 2008.
The New Delhi Auto Expo, which is a biennial event, has been the glittering showcase of the Indian automobile and auto-component industry for the last 18 years. A complete automotive show, it is a platform for the world to display state-of-the-art and latest developments in the automotive industry.
Ford may pick Tata Motors for JLR: reports
Ford Motor is likely to name Tata Motors as the preferred bidder for its Jaguar and Land Rover brands (JLR) on Dec. 21, according to international media reports. Tata Motors is expected to quote about £1bn (US$2bn) for the marquee luxury brands, the reports said. However, Ford may keep some interest in JLR under pressure from the British unions. Ford, which is spinning off the British luxury brands to focus on restructuring its loss-making North American operations, said last week it aimed to complete the sale in early 2008. Tata Motors is competing with Mahindra & Mahindra (M&M) and private equity firm One Equity Partners.
UK trade unions have already expressed their desire to back the Tatas. Officials from the British factories making the iconic brands believe that the family-owned Indian auto manufacturer would offer more long-term security than private equity firm One Equity. JLR together employ 15,000 people in the UK. The headcount of the two brands increases to 40,000 if employment throughout the supply and support chains is taken into account. However, union leaders have voiced some concern about Tata Motors' market positioning as a manufacturer of mass market brands. They fear that JLR brands will not fit well with Tata Motors' image. Unions also feel that Tata Motors may source components or manufacturing from India, leading to loss of British jobs.
Software companies struggle with user compliance: KPMG
Illegal and unlicensed software installations continue to be a significant problem and source of revenue loss for software companies worldwide, according to a recent survey of software company executives conducted by KPMG LLP, the U.S. audit, tax and advisory firm. In fact, 55 % of the executives estimated their firm’s revenue loss at greater than 10 % of total revenue.
Overall, in the KPMG study, 87 % of the executives claimed revenue loss due to unlicensed users. What’s more, 77 % of those surveyed agree with IDC (International Data Corp.) estimates that 35 % of software installed is unlicensed, leading to an estimated $34bn in lost revenue to the industry.
The KPMG study found that 64 % of software publishing executives indicated that their companies have a program designed to ensure customer compliance with software license agreements. And 36 % said that they do not have compliance programs.
“Executives of software companies are struggling to find answers to combat unlicensed software use,” said Arpinder Singh, Executive Director KPMG in India. “Some firms are either not executing their compliance programs or need them analyzed or overhauled. Effective compliance programs do help firms recoup revenue and maintain strong customer relationships.”
In fact, 20 % of the KPMG survey takers say that their compliance programs deliver over five % of their ongoing software revenue streams, and 30 % say they derive between five and 10 % of annual revenue. Seven % of respondents indicate that these programs actually contribute 10 % or more to the top line.
When asked if compliance activities resulted in negative outcomes with customers, 94 % of survey takers indicated that customer loss is very rare or never occurs. And, 50 % of those surveyed said customer satisfaction is a key measure used to gauge compliance-program success.
“In India also the picture is quite grim as almost 50 % software is pirated. One of the major problems in India is the weak law enforcement and awareness. Though a number of companies have started software compliance programme but we still need to go a long way. Several leading practices were revealed through our survey that can be applied by software publishers to help recover lost revenues, strengthen software license controls, and improve business relationships with major institutional customers.” concludes Arpinder Singh.
According to KPMG’s survey, software companies could be doing a better job of helping their customers understand what they have purchased, and what types of usage their license agreements allow. Only 36 % make such information easily accessible by their customers, while 43 % say they share such information on a case-by-case basis. In addition, the information that is made available may not be as comprehensive as necessary. While 45 % say their entitlement information is comprehensive, 55 % say the data may provide only an average or limited level of understanding.
KPMG surveyed 50 executives from software publishing companies collectively represented almost 50 % of total industry revenue. Twenty-eight % of those who responded are with companies earning US$5bn or more in software revenues. In addition, 62 % are with companies earning more than $250 million. Additionally, KPMG interviewed executives at six prominent software companies to validate the survey findings, and identify software license compliance practices worthy of note.
The survey was conducted in cooperation with the International Business Software Manager’s Association (IBSMA), a trade group that represents enterprise-level software customers. The objectives were to detect the substantive issues underlying this enormous industry problem by surveying a valid cross-section of software publishers. The approach also focused on identifying better practices in license compliance, so the industry could learn from successful techniques being applied in the industry today.
FII short selling to be permitted soon
: The Securities and Exchange Board of India on Thursday decided to permit short selling by institutional investors. Hitherto, only retail investors were allowed to short sell.
The markets regulator said it will put in place a securities lending and borrowing scheme to provide a mechanism for borrowing of securities to enable settlement of securities sold short.
Stock exchanges and depositories have been advised to put necessary systems in place in this regard.
The date of implementation will be communicated subsequently.
Short selling means selling a stock which the seller does not own at the time of trade.
Broad framework for short selling:
1. "Short selling" shall be defined as selling a stock which the seller does not own at the time of trade.
2. All classes of investors--retail and institutional--shall be permitted to short sell.
3. Naked short selling shall not be permitted and all investors would be required to honour their obligation of delivering the securities at the time of settlement.
4. No institutional investor shall be allowed to day trade--square-off transactions intra-day. In other words, all transactions would be grossed for institutional investors at the custodian level and the institutions would be required to fulfill their obligations on a gross basis. The custodians, however, would continue to settle their deliveries on a net basis with the stock exchanges.
5. The stock exchanges shall frame necessary uniform deterrent provisions and take appropriate action against the brokers for failure to deliver securities at the time of settlement which shall act as a sufficient deterrent against failure to deliver.
6. A scheme for Securities Lending and Borrowing shall be put in place to provide the necessary impetus to short sell, and its introduction shall be simultaneous with that of short selling by institutional investors.
7. Securities traded in F&O segment shall be eligible for short selling. SEBI may review the list of stocks eligible for short selling transactions from time to time.
8. Institutional investors shall disclose upfront at the time of placement of order whether the transaction is a short sale. However, retail investors would be permitted to make a similar disclosure by the end of the trading hours on the transaction day.
9. The brokers shall be mandated to collect the details on scrip-wise short sell positions, collate the data and upload it to the stock exchanges before the commencement of trading on the following trading day. The stock exchanges shall then consolidate such information and disseminate the same on their websites for the information of the public on a weekly basis.
Via ET
Post Market Commentary
The market closed higher after facing a lot of volatility throughout the trading session. The cues from the global markets are not in favor that led the domestic market to struggle a lot to close with marginal gains. The market opened on a firm note but pared most of its gains at the end of the session. The IT and Metal stocks remained in the limelight as most buying is seen from these baskets. Both the BSE Mid cap and Small Cap closed lower by 54.85 points and 102.04 points at 9,025.54 and 11,813.32 respectively. The BSE Sensex closed up by 70.61 points at 19,162.57 and NSE Nifty closed higher by 15.35 points at 5,766.50. The BSE Sensex touched its intraday high of 19,291.14 and low of 19,097.70 during the trading session. Overall, the market breadth was week as 1,754 stocks are closed in red while 1166 stocks are closed in green.
BSE Metal index closed higher by 70.90 points at 18,273. Scrips that gained are SH. Precoated (7.16%), SAIL (2.30%), Jindal steel (1.33%), JSW steel (1.16%), Hindalco (0.40%).
BSE Realty index closed up by 10.82 points at 11,614.08. Scrips that grew are Phoenix mill (4.78%), Mahindra Life (2.02%), Omaxe (1.92%), HDIL (1.33%) and DLF (1.09%).
BSE Capital goods index declined by 172.48 points to close at 18,725.69. Scrips that fell are AIA Engineer (3.28%), ABB (2.94%), Praj inds (2.38%) and BHEL (1.31%).
BSE Oil & Gas index fell by 34.76 points to close at 12,246.0 as Essar Oil (5.96%), RNRL (2.02%), Aban Offshore (1.39%), RPL (1.31%) and IOCL (0.56%) closed lower.
BSE Bankex index dropped by 25.37 points to close at 10,738.59 as CentBOP (4.34%), IOB (2.84%), BOB (1.72%), Andhra bank (1.17%) and Axis bank (1.07%) closed in negative.
BSE Health Care index dropped by 4.63 points to close at 4,242.53 as Glaxosmithkline (5.32%), Dishman pharma (3.78%), Fortis health (2.85%), Cadila health (2.36%) and Pfizer (1.43%).
IT stocks shine in lacklustre market
After yesterday's flat close, the market saw a gap up opening tracking positive Asian peers. But, indices came off their highs as investors booked profits in heavyweights, capital goods, and power stocks and the Sensex touched the day's low of 19,098. However, IT stocks moved up in anticipation of companies reporting good numbers and some value buying. The market recovered thereafter, but due to lack of buying interest in most of the counters the trading was range-bound with an upward bias. The market eventually gave up its early gains and wrapped up the session with a gain of 71 points at 19,163. The broad based Nifty closed the session at 5,767 up 15 points.
The market breadth was negative, with losers outpacing gainers in the ratio of 1.5:1. Of the 2,950 stocks traded on the Bombay Stock Exchange (BSE), 1,754 stocks declined, 1,166 stocks advanced and 30 stocks ended unchanged. Most of the sectoral indices ended in the red. BSE FMCG index dropped by 1.16% at 2,198 followed by BSE CG index (down 0.91% at 18,726) and BSE CD index (down 0.62% at 6,084). However, BSE IT index gained 3.34% at 4,321, BSE Tech index (up 1.50% at 3,777) and BSE Auto index (up 0.28% at 5,541).
Among the Sensex stocks, steel major Satyam Computer was the leading gainer and its stock price soared 5.85% at Rs428. Among other stocks Infosys advanced 3.68% at Rs1,698, Reliance Energy jumped 3.04% at Rs1,940, Tata Motors moved up by 2.86% at Rs711, TCS gained 2.34% at Rs1,045, Wipro added 1.77% at Rs492 and DLF surged 1.09% at Rs961. Among the laggards, ACC slipped 2.77% at Rs1,002, Cipla shed 2.04% at Rs211, ITC declined by 1.65% at Rs196, Ranbaxy fell by 1.65% at Rs196 and BHEL lost 1.31% at Rs2,368.
Over 6.11 crore IFCI shares changed hands on BSE followed by Ispat Industries (2.10 crore shares), IKF Technologies (1.78 crore shares), Harig Cranks (1.28 crore shares) and GV Films (1.27 crore shares).
IFCI registered a turnover of Rs473 crore on BSE followed by Reliance Energy (Rs291 crore), Reliance Industries (Rs251 crore), Ispat Industries (Rs175 crore) and Reliance Petroleum (Rs869 crore).
Derivatives expiry to keep market volatile
The market is expected to remain volatile in coming week as December 2007 derivatives contracts expire on Thursday, 27 December 2007. Trading for the week ahead will be truncated, as market will remain closed on Tuesday, 25 December 2007 on account of Christmas. Volumes may be low as foreign fund managers will be on annual vacation.
The 30-share BSE Sensex declined 868.26 points or 4.33% to 19,162.57 in the week ended Thursday, 20 December 2007. The S&P CNX Nifty slipped 281.20 points or 4.64% to 5,766.50 in the week. The market had posted gains during the preceding three weeks in a row.
Foreign Institutional Investors (FIIs) may resort to year-end profit taking. They follow calendar year as their accounting year. FIIs had been the key drivers of the recent rally. Their inflow in calendar year 2007 totaled Rs 67,329.50 crore (till 19 December 2007). They were net buyers to the tune of Rs 1,422 (till 19 December 2007).
Domestic market will also be influenced by the global trend. Investors remain nervous on concerns that credit market crisis may intensify further. Any major sell-off in global markets may cast its shadow here as well.
Meanwhile, traders are likely to start building positions towards the end of the month based on expectations of Q3 December 2007 results due next month.
Sensex sheds 868 points
The market snapped three weeks winning streak to post losses in the week ended Thursday, 20 December 2007 on profit booking in index pivotals. It saw high volatility throughout the week. The market posted gains in 2 out of 4 trading sessions in the week. Global markets were subdued during the week.
The 30-share BSE Sensex declined 868.26 points or 4.33% to 19,162.57 in the week ended Thursday, 20 December 2007. The S&P CNX Nifty slipped 281.20 points or 4.64% to 5,766.50 in the week.
Trading for the week started on weak note with the market undergoing major correction on Monday, 17 December 2007. The 30-share BSE Sensex plunged 769.48 points or 3.84% to 19,261.35 tracking weak global markets.
Sensex slipped 181.71 points or 0.94% to 19,079.64 on Tuesday, 18 December 2007 in volatile trading session. FMCG, healthcare and consumer durable stocks gained. Banking, metal and capital goods stocks edged lower.
On Wednesday, 19 December 2007, Sensex rose 12.32 points or 0.06% to 19,091.96, amid mixed trend in index pivotals.
The Sensex rose 70.61 points or 0.37% to 19,162.57 on Thursday, 20 December 2007, as profit booking erased some of early gains, in volatile trade. Global cues were mixed.
The market remains closed on Friday, 21 December 2007 on account of Bakri Id.
India’s largest private sector firm by market capitalization & oil refiner Reliance Industries declined 4.17% to Rs 2714.70 in the week. 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 declined 5.39% to Rs 2265.20 in the week. It shelled out Rs 1090 crore as advance tax for the third installment, up 26.7% over the tax it paid in the corresponding period in the previous year.
India's biggest power generation firm by revenue NTPC slipped 6.77% to Rs 229.40 75 in the week. The company is reportedly in active talks with more than one foreign power generation company for acquiring assets in excess of $1 billion (Rs 3,960 crore).
India's biggest commercial vehicle maker in terms of market share, Tata Motors edged lower by 6.44% to Rs 710.90 75 in the week. The company considered a front-runner to buy Ford Motor Co's luxury Jaguar and Land Rover brands, will unveil the world's cheapest car at an auto show in India next month. Tata Motors will showcase its $2,500 car at the Auto Expo in New Delhi on 10 January 2008, with a commercial launch planned for later in 2008.
Reliance Communications slumped 7.30% to Rs 706.50 75 in the week. It completed the acquisition of US-based Yipes Holdings that would give the company access to a Rs 4,00,000 crore global enterprise data market.
Reliance Energy (REL) rose 1.48% to Rs 1939.85 75 in the week. 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.
Thomas Cook (India) surged 58.75% to Rs 120.65 75 in the week. The stock surged on reports that it is going in for a private placement of over Rs 100 crore. However the company denied it after market hours on 19 December 2007.
IFCI tumbled 31.72% to Rs 76.75 in the week after the company, on Wednesday, 19 December 2007, called off the exercise to rope in a strategic partner through the private placement of 26% equity stake.
Annual inflation, based on the wholesale price index (WPI), rose 3.65% in the week ended 8 December 2007, lower than previous week's 3.75% rise.
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.
Turnover drops ahead of long weekend
The market ended with small gains on a volatile day of trade. The market breadth turned weak later during the day in contrast to a strong breadth earlier during the day. IT pivotals rallied. Reliance Industries edged higher.
FMCG, capital goods, consumer durables, banking stocks declined. Satyam Computer Services and Infosys were major gainers whereas ACC and Cipla were major losers from the Sensex pack. European markets were positive. Asian markets were mixed today, 20 December 2007. The Dow industrials and the S&P 500 declined slightly on Wednesday, 19 December 2007.
Annual inflation, based on the wholesale price index (WPI), rose 3.65% in the week ended 8 December 2007, lower than previous week's 3.75% rise, data released by the government during trading hours today showed.
The 30-share BSE Sensex rose 70.61 points or 0.37% to 19,162.57. It hit a high of 19,291.14 in mid-morning trade. At its day’s high Sensex had gained 199.18 points.
The S&P CNX Nifty up 15.35 points or 0.27% to 5,766.50.
BSE clocked a turnover of Rs 6206 crore, lower than Wednesday (19 December 2007)'s Rs 8,347.15 crore.
The market remains closed on Friday, 21 December 2007 on account of Bakri Id.
Nifty December 2007 futures were at 5780.05, at a premium of 13.55 points as compared to the spot closing of 5766.50.
The NSE's futures & options (F&O) segment turnover was Rs 73,067.55 crore, which was lower than Rs 79,137.15 crore on Wednesday, 19 December 2007.
Market breadth was weak. On BSE, 1,139 stocks advanced, 1,748 stocks declined and 26 stocks remained unchanged. 16 out of 30 stocks from the Sensex pack advanced.
BSE Mid-Cap index declined 0.6% to 9,025.54. BSE Small-Cap index declined 0.86% to 11,813.32. Both these indices underperformed Sensex.
BSE Metal index (up 0.39% to 18,273) and BSE IT index (up 3.34% to 4,320.63) outperformed Sensex.
BSE Auto index (up 0.28% to 5,541.26), BSE Realty index (up 0.09% to 11,614.08), BSE Health Care index (down 0.11% to 4,242.53), BSE Bankex (down 0.24% to 10,738.59),BSE Power index (down 0.27% to 4,211.32), BSE Consumer Durables index (down 0.62% to 6,084.31), BSE Capital Goods index (down 0.91% to 18,725.69) and BSE FMCG index (down 1.16% to 2,198.45) underperformed Sensex.
IT stocks surged. Wipro (up 1.77% to Rs 491.75), Tata Consultancy Services (up 2.34% to Rs 1,045.25), Infosys (up 3.68% to Rs 1,698.35), Satyam Computer Services (up 5.65% to Rs 427.70) edged higher.
FMCG majors declined. ITC (down 1.83% to Rs 196.05), United Spirits (down 2.56% to Rs 1,846), Hindustan Unilever (down 0.28% to Rs 211.450 edged lower.
Capital goods stocks declined. Bharat Heavy Electricals (down 1.27% to Rs 2,370), Larsen & Toubro (down 0.48% to Rs 3,979) and Suzlon Energy (down 3.66% to Rs 1,830) edged lower.
Banking stocks declined. ICICI Bank (down 0.35% to Rs 1,157), HDFC Bank (down 0.18% to Rs 1,654) edged lower. State Bank of India rose 0.31% to Rs 2,265.20.
Consumer durables stocks edged lower. Videocon Industries (down 2.11% to Rs 625.25), Titan Industries (down 1.45% to Rs 1,480) and Rajesh Exports (down 1.92% to Rs 869.15) edged lower.
India’s largest private sector firm by market capitalization & oil refiner Reliance Industries was up 0.37% to Rs 2,714.70. The stock came off session's high of Rs 2,754. Reliance Industries (RIL) is reportedly in talks with Tata Chemicals (TCL) for sale of 2.2 million metric standard cubic metres per day (mmscmd) of gas from KG basin once the ongoing dispute with Reliance Natural Resources (RNRL) is resolved.
India's second largest power utility by revenue Reliance Energy rose 3.04% to Rs 1,939.85.
Cipla (down 2.04% to Rs 210.95), ACC (down 2.77% to Rs 1,002.05) and Ranbaxy Laboratories (down 1.65% to Rs 196.40) edged lower.
India's biggest power generation firm by revenue NTPC declined 0.04% to Rs 229.40. The company is reprotedly in active talks with more than one foreign power generation company for acquiring assets in excess of $1 billion (Rs 3,960 crore).
India's biggest commercial vehicle maker in terms of market share, Tata Motors, rose 2.86% to Rs 710.90. The company which is considered a front-runner to buy Ford Motor Co's luxury Jaguar and Land Rover brands, will unveil the world's cheapest car at an auto show in India next month. Tata Motors will showcase its $2,500 car at the Auto Expo in New Delhi on 10 January 2008, with a commercial launch planned for later in 2008.
Tata Steel, the world's sixth largest steel maker, rose 0.07% to Rs 824.80. Vale, the world’s largest producer of iron ore and pellets, is reportedly in talks with Tata Steel to set up a steel slab plant in Brazil. The $20 billion mining company, formerly known as CVRD, has three plants under construction in Brazil in partnership with ThyssenKrupp, Dongkuk and Baosteel. Vale has a minority stake in these projects.
IFCI clocked the highest volume of 6.11 crore shares on BSE. The scrip declined 23.29% to Rs 76.75 after the company, on Wednesday, 19 December 2007, called off the exercise to rope in a strategic partner through the private placement of 26% equity stake.
Ispat Industries clocked the second highest volume of 2.1 crore shares on BSE. The stock declined 3.91% to Rs 82.25. IKF Technologies clocked the third highest volume of 1.78 crore shares. The scrip declined 9.35% to Rs 12.89. Harig Crankshaft clocked the fourth highest volume of 1.28 crore shares. The scrip hit 55 upper circuit at Rs 4.50.G V Films clocked the fifth highest volume of 1.27 crore . The scrip declined 7.22% to Rs 10.66.
IFCI clocked the highest turnover of Rs 473.69 crore on BSE. Reliance Energy (Rs 292.34 crore), Reliance Industries (Rs 251.92 crore), Ispat Industries (Rs 175.3 crore) and Reliance Petroleum (Rs 86.96 core) were other turnover toppers in that order.
European markets edged higher in early trade. Germany’s DAX (up 0.51% to 7,877.18) and UK’s FTSE 100 (up 0.56% to 6,319.60) edged higher.
Asian markets were mixed today, 20 December 2007. Japan's Nikkei (up 0.01% to 15,031.60), Shanghai Composite (up 2.05% to 5,043.54) edged higher. Hong Kong's Hang Seng (down 0.05% at 27,017.09), Taiwan's Taiwan Weighted (down 1.96% at 7,857.08), South Korea's Seoul Composite (down 0.92% at 1,844.37) declined.
The Dow industrials and the S&P 500 declined slightly on Wednesday, 19 December 2007, in light trading on concerns about more fallout from the housing slump. The Dow Jones industrial average declined 25.20 points, or 0.19%, to end at 13,207.27. The Standard & Poor's 500 Index shed 1.98 points, or 0.14%, at 1,453.00. But the Nasdaq Composite Index edged up 4.98 points, or 0.19%, to close at 2,601.01.
Traders are likely to start building positions towards the end of the month based on expectations of Q3 December 2007 results due next month.
US Market ends mixed amid credit jitters
Morgan Stanley shares end higher despite disappointing earnings but investors cheer Chinese investment
US Market witnessed another sea saw trading day for the entire day today, Wednesday, 19 December, 2007. Dow traded within 150 point range during the entire day but ultimately ended lower for the day. Nasdaq was the only index which managed to eke out some gains at the end. Among the ten economic sectors that ended in mixed fashion, Financials, Technology, Consumer Staple and Energy – each finished in positive territory.
The Dow Jones industrial Average ended the day with a loss of 25.2 points at 13,207.27. The Nasdaq Composite Index, finished higher by 4.98 points at 2,601.01. S&P 500 finished lower by 1.98 points at 1,453.
Seventeen out of thirty Dow stocks ended in red today. While IBM and Intel were a couple of the Dow winners, Walt Disney was one of the main Dow laggards.
Morgan Stanley reported more than expected losses for the fourth quarter. The larger than expected loss was due to $5.7 billion in additional mortgage-related write-downs. But Wall Street did not react much to this news and in fact lifted the stock as news of a $5 billion Chinese investment in the company cheered investors. News of the Chinese investment has sent the company's shares up 2.8%.
VSNL remains the main winner among Indian ADRs
Homebuilder Hovnanian reported a net loss after getting hit hard by the U.S. housing slump. On the other hand, General Mills reported strong second quarter results this morning, but included a forecast for 2008 that failed to meet analysts' expectations.
Among other major news, Standard & Poor's cut its rating on ACA Capital to CCC from A. The company also said it may downgrade its ratings on bond insurers Ambac Financial Group and MBIA Inc.
Also, the Fed announced this morning that banks have borrowed the funds for 28 days at a rate of 4.65%. The auction was one of the planned auctions the Fed announced last week on 17 December to help ease the liquidity problems hindering the financial markets.
Indian ADRs ended mixed today. VSNL was the top most winner gaging more than 21%.
Crude rises after four sessions of drop
After dropping for four consecutive sessions, crude oil prices rose today. Prices increased after Energy Department reported more than expected slump in crude inventories for the week ended 14 December. The drop took the inventory level to lowest level in almost three years. Crude-oil futures for light sweet crude for February delivery closed at $91.24/barrel (higher by $1.16/barrel or 1.3%) on the New York Mercantile Exchange. Futures rose as high as $92.6 earlier in the day after the Energy Department was out with the weekly inventory report. Prices are 46% higher than the year before.
As per the weekly inventory report by the Energy Department, U.S. crude inventories fell by 7.6 million barrels to 296.9 million barrels in the week ending 14 December, the lowest since February 2005. This was the fifth straight week of drop. U.S. refineries operated at 87.8% of their operable capacity last week, down 1% from the previous week's 88.8%.
Volume on the New York Stock Exchange topped 1 billion, and declining stocks outran those advancing 3 to 1. On the Nasdaq, 1.5 billion shares exchanged hands, and declining stocks edged ahead of those advancing, also by 3 to 1.
Tomorrow, investors will focus on economic reports to set the tone of trading. The final calculation of third quarter GDP and the weekly Jobless Claims data are due before market opens. In the post lunch hours, The Philadelphia Fed Survey is expected to offer a regional assessment of manufacturing activity.
Market may move up
The market may edge higher amid steady-to-firm Asian markets. However, a major upmove is likely as traders are unlikely to build large positions ahead of a long weekend. 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.
Volatility may remain high in the near term ahead of expiry of December 2007 derivatives contracts next Thursday, 27 December 2007. Given a slew of holidays, only four trading sessions are left for expiry of December 2007 derivatives contracts.
Traders are likely to start building positions towards the end of the month based on expectations of Q3 December 2007 results due next month.
As per provisional data, FIIs were net sellers of shares to the tune of Rs 1454.06 crore on Wednesday, 19 December 2007. Domestic funds bought shares worth a net Rs 350.60 crore on that day.
FIIs were net buyers to the tune of Rs 461.11 crore in the futures & options segment on Wednesday. According to data released by the NSE, FIIs were net buyers of index futures to the tune of Rs 400.23 crore and bought index options worth Rs 58.17 crore. They were net sellers of stock futures to the tune of Rs 11.78 crore and bought stock options worth Rs 14.49 crore on that day.
The Dow industrials and the S&P 500 declined slightly on Wednesday, 19 December 2007, in light trading on concerns about more fallout from the housing slump. The Dow Jones industrial average declined 25.20 points, or 0.19%, to end at 13,207.27. The Standard & Poor's 500 Index shed 1.98 points, or 0.14%, at 1,453.00. But the Nasdaq Composite Index edged up 4.98 points, or 0.19%, to close at 2,601.01.
In Asia, key benchmark indices in Hong Kong, Japan, China and South Korea, were up by between 0.06% to 1.6%. But Taiwan Weighted index was down 0.57% at 7,968.92.
Pre Market Watch
The Indian Markets today is likely to have a positive opening on the back of mixed global cues. On Wednesday, the markets 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 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. We expect the market to remain range bound during the trading session.
On Wednesday, the US market closed mixed. On Wednesday, the DJIA closed lower by 25.52 points at 13,206.95 along with S&P 500 index by 1.98 points to close at 1,453 while NASDAQ closed up by 4.98 points to close at 2,601.01.
Indian ADRs ended in mixed. In technology sector, Satyam grew by 0.48% along with Wipro by 0.36%, Patni computers 0.32% and Infosys 0.17%. In banking sector, HDFC bank and ICICI bank declined by (1.79%) and (0.59%) respectively. In telecommunication sector, VSNL and MTNL surged (21.69%) and (3.67%) respectively. Sterlite industries dropped by (2.24%).
The major stock markets in Asia are trading mixed. Japan''s Nikkei is trading up by 108.50 points at 15,139.01 while Hang Seng is trading lower by 21.58 points at 27,007.68. Taiwan weighted is also trading down by 40.88 points at 7,973.43. On Wednesday, the FIIs stood as the net seller both in equity and debt. The gross equity purchased was Rs3,446.50 Crore and the gross debt purchased was Rs2 Crore while the gross equity sold stood at Rs5,896.30 Crore and gross debt sold stood at Rs262.70Crore. Therefore, the net investment of equity reported was (Rs2,449.80 Crore) and net debt was (Rs260.70Crore).
Today, Nifty has support at 5,672 and resistance at 5,847 and BSE Sensex has support at 18,872 and resistance at 19,384.
Trading Calls
Sell IFCI with a stop loss of Rs 108 for a target of Rs 67.
Buy Wire and Wireless (India) with a stop loss of Rs 80 for a target of Rs 130.
Buy Mangalore Chemcials and Fert with a stop loss of Rs 38 for short-term targets of Rs 55.
Porwal, Brigade, Transformers, Burnpur, Aries, Manaksia
eClerx Services 270 to 315 20 to 25
BGR Energy Systems 425 to 480 340 to 350
Transformers & Rectifiers 425 to 465 300 to 310
Brigade Enterprises 351 to 390 10 to 15
Burnpur Cement Ltd. 12 3 to 5
SVPCL 42 Discount to Issue Price
Aries Agro 120 to 130 10 to 15
Manaksia Ltd. 140 to 160 20 to 25
Porwal Auto Components 68 to 75 8 to 10
Precision Pipes & Profiles 140 to 150 25 to 28
Morning Call
Market Grape Wine :
In House :
Nifty at a supp of
Tech Problem could not LOG .
Out House :
Markets at a support of 19012 & 18881 levels with resistance at 19331 & 19564 levels .
Buy : RIL & REL
Buy : INOX & DeepakFert
Buy : JpAsso & Jphydro
Buy : EssarOil & Nicco bullet
Buy : SKumar & ABAN
Buy : IBUllsreal & IBullsFin
Buy : Balrampur & BajajHind
Buy : Kotak & SBIN
Buy : Primesecu Bullet
Buy : Gail bullet
Dark Horse : Aban , PrimeSec , JpAsso , IBullReal , KOTAK , GeShipping , RIL & SBIN
Bullet for the Day : Tantia , Prime & Balrampur
Moldtek Technologies, TV18, Aurobhindo Pharma
Mold-Tek Technologies
Cluster: Ugly Duckling
Recommendation: Buy
Price target: Rs215
Current market price: Rs155
Unlocking value
Key points
- KPO business growing exponentially: Mold-Tek Technologies (MTT) has gained the critical size and required expertise in the niche area of structural engineering KPO services. The size of the opportunity in this space is huge and the company has taken inorganic initiatives to move up the value chain and establish presence in the key overseas markets. Consequently, we expect its KPO business to grow at a CAGR of around 160% over the next three years.
- Expanding the plastic packaging service business: In the recent past, the company invested in modernisation and expansion of its manufacturing units in the plastic packaging business. It also bagged orders from large and reputed clients in the oil & lubricant business, further consolidating its leadership position in the segment. The plastic packaging business is likely to grow at a CAGR of over 20% in the three-year period FY2007-10.
- Unlocking value in KPO business: The company has filed an application for the de-merger of its two businesses into separate entities. We believe this would result in the re-rating of the KPO business that is not only growing at an exponential rate but also enjoys much higher margins. We value the KPO business alone at Rs189 per share.
- Attractive valuations: With its revenues and earnings expected to grow at CAGR of 31% and 66% respectively over FY2007-10, MTT is attractively valued at 7.6x FY2009 and 5.3x FY2010 estimated earnings (as the existing combined entity). Taking into account the de-merger ratio also (holders of 100 existing shares to get 72 shares of the plastic company and 28 shares of the KPO company), the KPO business alone is valued at Rs189 per share. We recommend a Buy call on MTT with a price target of Rs215.
STOCK UPDATE
Aurobindo Pharma
Cluster: Ugly Duckling
Recommendation: Buy
Price target: Rs914
Current market price: Rs527
Aurobindo enters Omnicef market
Aurobindo Pharma (Aurobindo) has received approval from the US Food and Drug Administration to manufacture and market the oral suspension form of Cefdinir 125mg/ml and 250mg/ml in the USA. Cefdinir is the generic version of Abbott Laboratories' (Abbot) blockbuster product Omnicef in the USA, having a market size in excess of $850 million. Approximately $533 million of this comes from the suspension form of the product, which is used to treat a variety of ear, sinus, nose, throat and skin infections.
Television Eighteen India
Cluster: Emerging Star
Recommendation: Buy
Price target: Rs571
Current market price: Rs469
TV18 to launch a business daily
Mirroring our expectations, TV18 has announced entering the business daily space. The company has entered into a 50:50 joint venture with Jagran Prakashan for launching a Hindi business newspaper. The duo would also launch business dailies in other Indian languages. TV18 has aggressively entered print media by acquiring Infomedia India, which provided it a platform for entry and expansion in the print space. TV18 recently announced acquisition of Infomedia India a leading publisher of special interest magazines and Yellow Pages (for details refer our update "TV18 acquires Infomedia" dated December 12, 2007). The company further forged a partnership with Forbes Media, a leading global business publisher to launch a business magazine in January 2008 (refer our update "TV18 partners Forbes").
Fedders Lloyd
We recommend a buy in Fedders Lloyd Corporation at current market price. From the daily chart of Fedders Lloyd Corporation, we see that it had been on a medium-term down trend between August and November (from a high of Rs 178 to a low of Rs 120). However, the stock found support at a significant long-term support level of Rs 125 and bounced up 13 per cent on December 13. This reversal helped the stock to penetrate the medium-term down trendline. Subsequently, the stock co mmenced to move sideways. Currently, the stock is trading just above the significant long-term support level (Rs 125). The moving average convergence divergence is on the verge of entering the positive region. We note that the downside risk in this stock is limited. The immediate support for the stock is at Rs 125 and the next support is pegged at Rs 115. Short-term investors with high risk profile can buy the stock while keeping a stop-loss at Rs 120. We expect the stock to bounce up and rally to Rs 150 and beyond that to Rs 154 in the short-term.
Via Businessline
Precious metals end mixed
Gold ends marginally lower as dollar strengthens but silver gains as copper rallies
Precious metals ended mixed today after dollar gains capped gold’s rise in prices. Gold prices fell today but silver prices rose today, Wednesday, 19 December, 2007. The dollar strengthened today even as US stocks slumped. Gold generally moves in the opposite direction of the U.S. currency. Gold, as a dollar-denominated commodity, suffers from dollar strength.
Comex Gold for February delivery fell $2 (0.2%) to close at $805.4 an ounce on the New York Mercantile Exchange today. Earlier the price fell to almost $802.2/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 5.7 cents (0.5%) to $14.222 an ounce. Silver prices climbed up as copper rallied by more than 3% today. Prices touched 26 year high on 7 November, after reaching $16.275. The metal has climbed 10% 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 index, which tracks the performance of the greenback against a basket of other major currencies, gained 0.3% at 77.605.
In the energy market, oil prices rose for the first time in five sessions and ended $1.16/barrel higher at $91.24/barrel. Prices increased today after Energy Department reported more than expected slump in crude inventories for week ended 14 December.
Gold had climbed 25.8% this year till date as lower interest rates had sent the dollar tumbling, and crude-oil prices rose to a record. Dollar is still 8.3% 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 lower by Rs 5 (0.05%) at Rs 10,257 per 10 grams. Prices rose to a high of Rs 10,300 per 10 grams and fell to a low of Rs 10,222 per 10 grams during the day’s trading.
At the MCX, silver prices for March delivery closed Rs 67 (0.4%) higher at Rs 18,759/Kg. Prices opened at Rs 18,702/kg and went to a high of Rs 18,842/Kg during the day’s trading.
Crude gains after four consecutive sessions of drop
Prices rise by more than a dollar as crude inventories are reported at three year low levels
After dropping for four consecutive sessions, crude oil prices rose today. Prices increased after Energy Department reported more than expected slump in crude inventories for the week ended 14 December. The drop took the inventory level to lowest level in almost three years.
For the day ending Wednesday, 19 December, 2007, crude-oil futures for light sweet crude for February delivery closed at $91.24/barrel (higher by $1.16/barrel or 1.3%) on the New York Mercantile Exchange. Futures rose as high as $92.6 earlier in the day after the Energy Department was out with the weekly inventory report. Prices are 46% higher than the year before.
As per the weekly inventory report by the Energy Department, U.S. crude inventories fell by 7.6 million barrels to 296.9 million barrels in the week ending 14 December, the lowest since February 2005. This was the fifth straight week of drop. U.S. refineries operated at 87.8% of their operable capacity last week, down 1% from the previous week's 88.8%.
As per EIA, at 296.9 million barrels, U.S. crude inventories are in the lower half of the average range for this time of year and at lowest level since February, 2005. U.S. crude-oil imports averaged 9.1 million barrels per day last week, down 952,000 barrels per day from the previous week.
The EIA also reported that U.S. motor gasoline inventories increased by 3 million barrels to 205.2 million barrels last week and distillate supplies, which include heating oil and diesel, decreased by 2.1 million barrels to 129.4 million barrels.
Brent crude oil for February settlement rose $2.09 (2.3%) to $92.21 on the London-based ICE Futures Europe exchange.
Natural gas, gasoline and heating oil – all rise
January natural gas today rose 3.8 cents at $7.179 per million British thermal units.
Against this backdrop, January reformulated gasoline gained 2.76 cents at $2.3319 a gallon and January heating oil edged up 4.25 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 3597/barrel, higher by Rs 67 (1.9%) against previous day’s close. Natural gas for December delivery closed at Rs 279.5/mmtbu, lower by 2.1/mmtbu (0.7%).
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, 2008 meeting in Vienna.
Trading Calls
Nifty (5751) Sup 5697 Res 5833
Buy Peninsula Land (142) SL 138 Tgt 149, 151
Buy DLF (953) SL 945 Tgt 971, 974
Buy AB Nuvo (1801) SL 1785 Tgt 1840, 1845
Sell GNFC (184) SL 188 tgt 177, 175
Sell STAR (287) SL 292 Tgt 279, 277
Another choppy day in the offing
To see what is in front of one's nose needs a constant struggle.
The market has been on a rollercoaster ride over the past 3-4 months, primarily due to the subprime woes in the US, selling by FIIs and lack of major local triggers. The Sensex has fluctuated between 17,000 and 20,500 during this period. It went as low as 13,779 on Aug. 17 before rebounding from there to 19,977 on Oct. 29. After several attempts at crossing the 20k mark (in October and November), the Sensex finally managed to rise above the milestone on Dec. 11. Its closing high is 20,375, struck on Dec. 12 and intra-day high is 20,498, hit on Dec. 13. It started correcting again and went as low as 19,079, on Dec. 18, owing to resurfacing of subprime concerns and its fallout on the global markets. Yesterday, the Sensex shut shop at 19,091.
In a nutshell, though the bulls have managed to weather a lot of storms, the ride has not been smooth at all. There have been several bumps and roadblocks along the way. Volatility has increased manifold. The trend has been no different this month. After a positive start and crossing the 20k mark, the Sensex has been facing fresh selling pressure in the past couple of days on the back of weakness in the US and other global markets. FIIs have resumed their selling as well in the last few days. In fact, the trend in FII flows has been extremely unpredictable and erratic, making the main indices swing heavily. In the meantime, small- and mid-cap shares (including penny stocks) have captured the imagination of investors.
The picture may not change much today or over the next few days, as the near-term outlook is murky and the Indian market is dancing to the tunes of global indicators. FII selling has not been of much help either. But, despite the choppy trend, nothing is stopping investors from betting on small- and mid-cap shares. We expect the market to open on a cautious to slightly positive note, given the uncertainty prevailing in the global markets. Though the side counters (non-index stocks) may continue to hog the limelight and extend their gains, one must be careful as the rally in these shares is not real. Investors may indulge in select buying in quality stocks for long-term purpose or stay on the sidelines and wait for more signals on market direction.
US stocks closed mixed on Wednesday after a highly volatile session. Stocks were up in early trading as the Federal Reserve announced results for its first auction of $20bn, signaling strong demand for the plan aimed at defusing the stress in the credit markets.
But Morgan Stanley's $5.7bn subprime related writedown and credit market concerns brought up by Standard & Poor's warnings about bond insurers' credit ratings, dragged the markets down in the afternoon.
Target and Macy's led a gauge of retailers lower after ShopperTrak RCT Corp. said winter storms and rising gasoline prices hurt sales. Union Pacific, the biggest railroad, slid the most since August. Darden Restaurants posted its biggest drop ever after earnings missed analysts' estimates.
The S&P 500 dropped 2 points, or 0.1%, to 1,453. The Dow Jones Industrial Average lost 25 points, or 0.2%, to 13,207.27. The Nasdaq Composite Index increased 5 points, or 0.2%, to 2,601.01.
Market breadth was negative. About 15 stocks fell for every 14 that rose on the New York Stock Exchange.
Morgan Stanley posted a bigger-than-expected quarterly loss and said it would take an additional $5.7bn in writedowns on top of the $3.7bn it had already announced, due to the subprime mortgage mess. Morgan also announced that it will receive a $5bn capital investment from a Chinese state-run investment fund. Morgan shares were higher, along with other major banks including Lehman Brothers and JP Morgan.
In the latest bad news for the housing sector, the level of foreclosures was up 68% in November from a year ago, according to tracking service RealtyTrac. On the upside, foreclosures fell 10% from the previous month.
Thursday brings economic reports from the government on third quarter GDP and leading economic indicators. Also, Bear Stearns will report its earnings for the fourth quarter.
After the close of trade, software maker Oracle reported better-than-expected earnings and sales, giving the company's shares a boost in after hours trading.
Treasury prices rose, lowering the yield on the 10-year note to 4.03% from 4.14% late on Tuesday. US light crude oil for January delivery rose $1.16 cents to $91.24 on the New York Mercantile Exchange after the government's weekly report showed lower than expected crude supplies. In currency trading, the dollar gained versus the euro and the yen. COMEX gold for February delivery fell $2.00 to $805.40 an ounce.
European shares closed lower in another choppy session, with real estate and construction firms pacing the decline amid worries about housing markets. The pan-European Dow Jones Stoxx 600 index fell 0.5% to 358.47. The UK's FTSE 100 advanced 0.1% to 6,284.50, while the German DAX 30 slipped 0.2% to 7,837.32 and the French CAC-40 ended 0.2% lower at 5,497.42.
In the emerging markets, the Bovespa in Brazil gained 1% at 61,721 while the IPC index in Mexico was down 0.6% at 29,074. The RTS index in Russia declined 0.2% to 2264 and the ISE National-30 index in Turkey was down nearly 1% at 68,404.
Asian markets were trading mixed. The Nikkei in Tokyo was up 108 points at 15,139 while the Hang Seng in Hong Kong was almost flat at 27,023. The Kospi in Seoul was also static at 1861 and the Shanghai Composite index in china was up 37 points at 4978.
The MSCI Asia Pacific Index gained 0.4% at 152.58 at 11:00 a.m. in Tokyo, snapping a six-day losing streak. Stock exchanges in Singapore, Malaysia and Indonesia are closed for a public holiday.
The yen traded near a six-week low against the dollar on speculation that the Bank of Japan (BOJ) would leave the benchmark overnight lending rate at 0.5% today, and Governor Toshihiko Fukui will say there was no set time for raising interest rates.
Volatility to prevail
Bulls finally managed to end the day in green after struggling for four straight trading sessions. Volatility was the order of the day as benchmark Sensex and Nifty index gyrated over 500 and 160 points during the session.
After opening with a positive gap up, key indices erased all its gains in the afternoon trades on back of weak cues form the Asian and European markets. However, later in the day bulls fought back managing to end the day with modest gains.
Finally, 30-share Sensex closed flat at 19,091 hitting a intra-high of 19,397 and a low of 18,866 and Nifty closed flat at 5,751 touching an intra-day high of 5,840 and a low of 5,676.
Patel Integrated surged by over 15% to Rs99 after the company announced that it approved Rs1.8mn preferential share sale. The scrip touched an intra-day high of Rs102 and a low of Rs89 and recorded volumes of over 14,00,000 shares on NSE.
Aurobindo Pharma was down 1% to Rs526. The company announced that it secured approval for antibiotic cefdinir suspension. The scrip touched an intra-day high of Rs548 and a low of Rs523 and recorded volumes of over 2,00,000 shares on NSE.
India Cements advanced 2.2% to Rs301 after the company announced that would sell Rs20.8mn shares. The scrip touched an intra-day high of Rs308 and a low of Rs298 and recorded volumes of over 23,00,000 shares on NSE.
Kopran spurred by over at 4.5% to Rs40.20 as reports stated that the company is in talks to sell stake to domestic companies. The scrip touched an intra-day high of Rs40.45 and a low of Rs39.25 and recorded volumes of over 2,00,000 shares on NSE.
IOC dropped 1.2% to Rs632. Reports stated that the company had set aside US$3bn for overseas acquisition. The scrip touched an intra-day high of Rs664 and a low of Rs626 and recorded volumes of over 7,00,000 shares on NSE.
National Aluminum gained 3.2% to Rs427 after the company announced that they would spend Rs4.09bn to raise capacity and also declared expansion of Bauxite-mining capacity to 6.82mn tons. The scrip touched an intra-day high of Rs433 and a low of Rs419 and recorded volumes of over 3,00,000 shares on NSE.
DCM Shriram Industries marginally gained 0.6% to Rs126 after the company announced that they would sell 7 lac shares to founders. The scrip touched an intra-day high of Rs129 and a low of Rs120 and recorded volumes of over 18,000 shares on NSE.
Shringar Cinemas gained 0.5% to Rs102 after the company announced that they tied up with HDIL for multiplexes. The scrip touched an intra-day high of Rs109 and a low of Rs101 and recorded volumes of over 2,00,000 shares on NSE.
Suzlon Energy gained 2.5% to Rs1901 after the company announced that they would raise Rs21.83bn via share sale. The scrip has touched an intra-day high of Rs1919 and a low of Rs1875 and recorded volumes of over 9,00,000 shares on NSE.
L&T gained 0.6% to Rs3989 after the company declared that they secured Rs2.87bn elevated access road contract. The scrip touched an intra-day high of Rs4049 and a low of Rs3951 and recorded volumes of over 6,00,000 shares on NSE.
What the FIIs are doing
FIIs were net sellers of Rs14.54bn (provisional) in the cash segment on Wednesday while the local institutions pumped in Rs3.5bn. In the F&O segment, foreign funds were net buyers of Rs4.61bn.
On Tuesday, FIIs were net sellers of Rs24.5bn in the cash segment. Mutual Funds were net sellers of Rs3.81bn on the same day.
Stocks in News:
IFCI stake sale has been called off due to differences with Sterlite-Morgan Stanley consortium over management control. (ET)
Kingfisher and Deccan board approves merger. (ET)
Glenmark receives domestic patent for its asthma molecule, Oglemilast. (ET)
BHEL’s bid to build Rs84bn electricity-generation factory gets rejected. (FE)
Reliance Industries (RIL) is in talks with Tata Chemicals to sell KG basin gas. (ET)
Tata Power eyes shipping and logistics business and plans to raise Rs40bn from domestic and international market. (BL)
SAIL signs a pact with Rail Vikas for transportation of 5 lakh tons of imported coking coal per year. (BL)
Vale, world’s largest iron ore pellets manufacturer, is in talks with Tata Steel to set up a steel slab plant in Brazil. (BS)
Reliance Retail to enter food trading business as a part of major re-structuring of its food and grocery initiative. (ET)
Dabur India is planning acquisitions of an FMCG company in foods or personal care segment. (DNA)
Hero Honda forays into used two-wheeler trading business under the ‘Hero Honda SURE!’ brand. (ET)
Union Bank is planning to enter mutual fund business and venture capital business. (FE)
Welspun India buys 76% stake in Portugal-based company for Rs600mn. (ET)
MRF plans to spend Rs5bn towards setting up a greenfield two-wheeler and four-wheeler tyre facility in TN. (BS)
Rolta India plans to enter real estate business through a group company, Rolta Infrastructure. (DNA)
JK Tyres to hike tyre prices in next quarter. (BL)
EMCO promoters keen to raise stake in the company to 51%. (BS)
The telecom spectrum panel recommends the government to consider new allocation options, including auction. (ET)
Allahabad High Court asks UP Government to rework the cane state advisory price (SAP) fixed by it for purchase of sugarcane. (ET)
Chief Ministers of five mineral-rich states has urged the PM to make local value addition of minerals the prime objective of National Mineral Policy (NMP). (BS).
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